WW GRAINGER INC (GWW)
US3848021040 - Common Stock
Taking everything into account, GWW scores 6 out of 10 in our fundamental rating. GWW was compared to 51 industry peers in the Trading Companies & Distributors industry. GWW gets an excellent profitability rating and is at the same time showing great financial health properties. GWW is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
GWW had positive earnings in the past year.
GWW had a positive operating cash flow in the past year.
In the past 5 years GWW has always been profitable.
In the past 5 years GWW always reported a positive cash flow from operatings.
1.2 Ratios
GWW's Return On Assets of 21.65% is amongst the best of the industry. GWW outperforms 98.04% of its industry peers.
GWW has a better Return On Equity (56.86%) than 90.20% of its industry peers.
GWW has a better Return On Invested Capital (33.23%) than 100.00% of its industry peers.
GWW had an Average Return On Invested Capital over the past 3 years of 27.96%. This is significantly above the industry average of 11.08%.
The 3 year average ROIC (27.96%) for GWW is below the current ROIC(33.23%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.65% | ||
| ROE | 56.86% | ||
| ROIC | 33.23% |
ROA(3y)19.55%
ROA(5y)16.77%
ROE(3y)59.26%
ROE(5y)52.31%
ROIC(3y)27.96%
ROIC(5y)25.71%
1.3 Margins
GWW's Profit Margin of 10.94% is fine compared to the rest of the industry. GWW outperforms 72.55% of its industry peers.
GWW's Profit Margin has improved in the last couple of years.
GWW has a Operating Margin of 15.52%. This is in the better half of the industry: GWW outperforms 70.59% of its industry peers.
In the last couple of years the Operating Margin of GWW has grown nicely.
The Gross Margin of GWW (39.29%) is better than 66.67% of its industry peers.
GWW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.52% | ||
| PM (TTM) | 10.94% | ||
| GM | 39.29% |
OM growth 3Y11.81%
OM growth 5Y5.59%
PM growth 3Y23.51%
PM growth 5Y9.76%
GM growth 3Y3.15%
GM growth 5Y0.35%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so GWW is creating value.
The number of shares outstanding for GWW has been reduced compared to 1 year ago.
GWW has less shares outstanding than it did 5 years ago.
The debt/assets ratio for GWW has been reduced compared to a year ago.
2.2 Solvency
GWW has an Altman-Z score of 10.92. This indicates that GWW is financially healthy and has little risk of bankruptcy at the moment.
GWW's Altman-Z score of 10.92 is amongst the best of the industry. GWW outperforms 96.08% of its industry peers.
The Debt to FCF ratio of GWW is 1.29, which is an excellent value as it means it would take GWW, only 1.29 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of GWW (1.29) is better than 76.47% of its industry peers.
A Debt/Equity ratio of 0.56 indicates that GWW is somewhat dependend on debt financing.
GWW has a Debt to Equity ratio of 0.56. This is comparable to the rest of the industry: GWW outperforms 56.86% of its industry peers.
Even though the debt/equity ratio score it not favorable for GWW, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | 1.29 | ||
| Altman-Z | 10.92 |
ROIC/WACC3.84
WACC8.66%
2.3 Liquidity
A Current Ratio of 2.19 indicates that GWW has no problem at all paying its short term obligations.
GWW's Current ratio of 2.19 is in line compared to the rest of the industry. GWW outperforms 58.82% of its industry peers.
GWW has a Quick Ratio of 1.33. This is a normal value and indicates that GWW is financially healthy and should not expect problems in meeting its short term obligations.
GWW has a Quick ratio (1.33) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.19 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
GWW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.82%, which is quite good.
The Earnings Per Share has been growing by 17.02% on average over the past years. This is quite good.
Looking at the last year, GWW shows a small growth in Revenue. The Revenue has grown by 6.06% in the last year.
The Revenue has been growing slightly by 7.99% on average over the past years.
EPS 1Y (TTM)13.82%
EPS 3Y31.36%
EPS 5Y17.02%
EPS Q2Q%0.1%
Revenue 1Y (TTM)6.06%
Revenue growth 3Y11.78%
Revenue growth 5Y7.99%
Sales Q2Q%3.52%
3.2 Future
The Earnings Per Share is expected to grow by 5.13% on average over the next years.
The Revenue is expected to grow by 5.97% on average over the next years.
EPS Next Y8.27%
EPS Next 2Y8.84%
EPS Next 3Y7.82%
EPS Next 5Y5.13%
Revenue Next Year5.44%
Revenue Next 2Y6.16%
Revenue Next 3Y6.65%
Revenue Next 5Y5.97%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 26.47, which means the current valuation is very expensive for GWW.
60.78% of the companies in the same industry are cheaper than GWW, based on the Price/Earnings ratio.
GWW is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 24.41, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 22.35, which indicates a rather expensive current valuation of GWW.
66.67% of the companies in the same industry are cheaper than GWW, based on the Price/Forward Earnings ratio.
GWW is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 20.59, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.47 | ||
| Fwd PE | 22.35 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of GWW indicates a slightly more expensive valuation: GWW is more expensive than 68.63% of the companies listed in the same industry.
GWW's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.87 | ||
| EV/EBITDA | 17.26 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of GWW may justify a higher PE ratio.
PEG (NY)3.2
PEG (5Y)1.55
EPS Next 2Y8.84%
EPS Next 3Y7.82%
5. Dividend
5.1 Amount
GWW has a yearly dividend return of 0.86%, which is pretty low.
Compared to an average industry Dividend Yield of 1.75, GWW has a dividend in line with its industry peers.
With a Dividend Yield of 0.86, GWW pays less dividend than the S&P500 average, which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
5.2 History
The dividend of GWW is nicely growing with an annual growth rate of 6.92%!
GWW has been paying a dividend for at least 10 years, so it has a reliable track record.
GWW has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.92%
Div Incr Years33
Div Non Decr Years33
5.3 Sustainability
GWW pays out 22.54% of its income as dividend. This is a sustainable payout ratio.
GWW's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP22.54%
EPS Next 2Y8.84%
EPS Next 3Y7.82%
WW GRAINGER INC
NYSE:GWW (7/26/2024, 7:04:00 PM)
After market: 970.34 0 (0%)970.34
+16.19 (+1.7%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap47.61B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.47 | ||
| Fwd PE | 22.35 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)3.2
PEG (5Y)1.55
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.65% | ||
| ROE | 56.86% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 15.52% | ||
| PM (TTM) | 10.94% | ||
| GM | 39.29% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.98
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.56 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.19 | ||
| Quick Ratio | 1.33 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)13.82%
EPS 3Y31.36%
EPS 5Y
EPS Q2Q%
EPS Next Y8.27%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)6.06%
Revenue growth 3Y11.78%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y