WW GRAINGER INC (GWW) Stock Fundamental Analysis
USA - NYSE:GWW - US3848021040 - Common Stock
993.64 USD
-18.98 (-1.87%)
993.64 USD
0 (0%)
GWW gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 50 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 valied quite expensively at the moment, while it does show a decent growth rate. These ratings could make GWW a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
In the past year GWW was profitable.
GWW had a positive operating cash flow in the past year.
GWW had positive earnings in each of the past 5 years.
Each year in the past 5 years GWW had a positive operating cash flow.
1.2 Ratios
The Return On Assets of GWW (21.51%) is better than 98.00% of its industry peers.
The Return On Equity of GWW (52.31%) is better than 92.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 29.46%, GWW belongs to the top of the industry, outperforming 98.00% of the companies in the same industry.
GWW had an Average Return On Invested Capital over the past 3 years of 30.88%. This is significantly above the industry average of 10.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.51% | ||
| ROE | 52.31% | ||
| ROIC | 29.46% |
ROA(3y)21.49%
ROA(5y)18.26%
ROE(3y)59.66%
ROE(5y)54.53%
ROIC(3y)30.88%
ROIC(5y)27.39%
1.3 Margins
GWW has a Profit Margin of 10.99%. This is in the better half of the industry: GWW outperforms 80.00% of its industry peers.
In the last couple of years the Profit Margin of GWW has grown nicely.
GWW has a Operating Margin of 15.27%. This is in the better half of the industry: GWW outperforms 76.00% of its industry peers.
GWW's Operating Margin has improved in the last couple of years.
The Gross Margin of GWW (39.25%) is better than 76.00% of its industry peers.
In the last couple of years the Gross Margin of GWW has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.27% | ||
| PM (TTM) | 10.99% | ||
| GM | 39.25% |
OM growth 3Y9.16%
OM growth 5Y5.04%
PM growth 3Y11.56%
PM growth 5Y8.51%
GM growth 3Y2.79%
GM growth 5Y0.56%
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.
GWW has less shares outstanding than it did 1 year ago.
The number of shares outstanding for GWW has been reduced compared to 5 years ago.
The debt/assets ratio for GWW is higher compared to a year ago.
2.2 Solvency
GWW has an Altman-Z score of 11.21. This indicates that GWW is financially healthy and has little risk of bankruptcy at the moment.
GWW has a Altman-Z score of 11.21. This is amongst the best in the industry. GWW outperforms 98.00% of its industry peers.
GWW has a debt to FCF ratio of 1.65. This is a very positive value and a sign of high solvency as it would only need 1.65 years to pay back of all of its debts.
GWW has a Debt to FCF ratio of 1.65. This is in the better half of the industry: GWW outperforms 80.00% of its industry peers.
A Debt/Equity ratio of 0.64 indicates that GWW is somewhat dependend on debt financing.
GWW has a Debt to Equity ratio of 0.64. This is comparable to the rest of the industry: GWW outperforms 50.00% 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 | 0.64 | ||
| Debt/FCF | 1.65 | ||
| Altman-Z | 11.21 |
ROIC/WACC3.12
WACC9.44%
2.3 Liquidity
GWW has a Current Ratio of 2.82. This indicates that GWW is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of GWW (2.82) is better than 72.00% of its industry peers.
GWW has a Quick Ratio of 1.64. 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 of 1.64. This is in the better half of the industry: GWW outperforms 70.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.82 | ||
| Quick Ratio | 1.64 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.11% over the past year.
Measured over the past years, GWW shows a quite strong growth in Earnings Per Share. The EPS has been growing by 17.64% on average per year.
The Revenue has been growing slightly by 4.35% in the past year.
GWW shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.37% yearly.
EPS 1Y (TTM)6.11%
EPS 3Y25.23%
EPS 5Y17.64%
EPS Q2Q%2.15%
Revenue 1Y (TTM)4.35%
Revenue growth 3Y9.65%
Revenue growth 5Y8.37%
Sales Q2Q%5.61%
3.2 Future
Based on estimates for the next years, GWW will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.78% on average per year.
The Revenue is expected to grow by 7.02% on average over the next years.
EPS Next Y2.38%
EPS Next 2Y6.94%
EPS Next 3Y8.03%
EPS Next 5Y9.78%
Revenue Next Year4.89%
Revenue Next 2Y5.65%
Revenue Next 3Y5.97%
Revenue Next 5Y7.02%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 25.21 indicates a quite expensive valuation of GWW.
Compared to the rest of the industry, the Price/Earnings ratio of GWW is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 27.20. GWW is around the same levels.
GWW is valuated rather expensively with a Price/Forward Earnings ratio of 22.30.
GWW's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of GWW to the average of the S&P500 Index (22.71), we can say GWW is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.21 | ||
| Fwd PE | 22.3 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as GWW.
GWW's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.56 | ||
| EV/EBITDA | 17.21 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates GWW does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of GWW may justify a higher PE ratio.
PEG (NY)10.61
PEG (5Y)1.43
EPS Next 2Y6.94%
EPS Next 3Y8.03%
5. Dividend
5.1 Amount
GWW has a yearly dividend return of 0.89%, which is pretty low.
GWW's Dividend Yield is a higher than the industry average which is at 2.74.
Compared to an average S&P500 Dividend Yield of 2.38, GWW's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
5.2 History
On average, the dividend of GWW grows each year by 7.57%, which is quite nice.
GWW has paid a dividend for at least 10 years, which is a reliable track record.
GWW has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)7.57%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
GWW pays out 22.89% of its income as dividend. This is a sustainable payout ratio.
GWW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP22.89%
EPS Next 2Y6.94%
EPS Next 3Y8.03%
993.64
-18.98 (-1.87%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners74.04%
Inst Owner Change-0.74%
Ins Owners6.08%
Ins Owner Change0.56%
Market Cap47.53B
Analysts66.67
Price Target1048.22 (5.49%)
Short Float %1.89%
Short Ratio2.49
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
Yearly Dividend8.62
Dividend Growth(5Y)7.57%
DP22.89%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.49%
Min EPS beat(2)-1.9%
Max EPS beat(2)2.89%
EPS beat(4)1
Avg EPS beat(4)-0.59%
Min EPS beat(4)-1.99%
Max EPS beat(4)2.89%
EPS beat(8)4
Avg EPS beat(8)0.56%
EPS beat(12)8
Avg EPS beat(12)2.56%
EPS beat(16)12
Avg EPS beat(16)3.78%
Revenue beat(2)0
Avg Revenue beat(2)-0.83%
Min Revenue beat(2)-1.24%
Max Revenue beat(2)-0.42%
Revenue beat(4)0
Avg Revenue beat(4)-1.04%
Min Revenue beat(4)-1.28%
Max Revenue beat(4)-0.42%
Revenue beat(8)0
Avg Revenue beat(8)-1.34%
Revenue beat(12)1
Avg Revenue beat(12)-1.04%
Revenue beat(16)5
Avg Revenue beat(16)-0.25%
PT rev (1m)-0.49%
PT rev (3m)-4.5%
EPS NQ rev (1m)0.07%
EPS NQ rev (3m)-5.57%
EPS NY rev (1m)-2.45%
EPS NY rev (3m)-2.42%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)0.51%
Revenue NY rev (1m)0.51%
Revenue NY rev (3m)0.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.21 | ||
| Fwd PE | 22.3 | ||
| P/S | 2.72 | ||
| P/FCF | 33.56 | ||
| P/OCF | 23.05 | ||
| P/B | 12.94 | ||
| P/tB | 15.62 | ||
| EV/EBITDA | 17.21 |
EPS(TTM)39.41
EY3.97%
EPS(NY)44.55
Fwd EY4.48%
FCF(TTM)29.6
FCFY2.98%
OCF(TTM)43.11
OCFY4.34%
SpS365.48
BVpS76.81
TBVpS63.6
PEG (NY)10.61
PEG (5Y)1.43
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.51% | ||
| ROE | 52.31% | ||
| ROCE | 38.49% | ||
| ROIC | 29.46% | ||
| ROICexc | 32.23% | ||
| ROICexgc | 35.81% | ||
| OM | 15.27% | ||
| PM (TTM) | 10.99% | ||
| GM | 39.25% | ||
| FCFM | 8.1% |
ROA(3y)21.49%
ROA(5y)18.26%
ROE(3y)59.66%
ROE(5y)54.53%
ROIC(3y)30.88%
ROIC(5y)27.39%
ROICexc(3y)34.68%
ROICexc(5y)30.48%
ROICexgc(3y)38.97%
ROICexgc(5y)34.58%
ROCE(3y)40.34%
ROCE(5y)35.78%
ROICexcg growth 3Y13.79%
ROICexcg growth 5Y5.15%
ROICexc growth 3Y14.65%
ROICexc growth 5Y6.97%
OM growth 3Y9.16%
OM growth 5Y5.04%
PM growth 3Y11.56%
PM growth 5Y8.51%
GM growth 3Y2.79%
GM growth 5Y0.56%
F-Score5
Asset Turnover1.96
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 1.65 | ||
| Debt/EBITDA | 0.8 | ||
| Cap/Depr | 262.6% | ||
| Cap/Sales | 3.7% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 70.74% | ||
| Profit Quality | 73.67% | ||
| Current Ratio | 2.82 | ||
| Quick Ratio | 1.64 | ||
| Altman-Z | 11.21 |
F-Score5
WACC9.44%
ROIC/WACC3.12
Cap/Depr(3y)184.73%
Cap/Depr(5y)160.05%
Cap/Sales(3y)2.51%
Cap/Sales(5y)2.23%
Profit Quality(3y)79.52%
Profit Quality(5y)87.44%
High Growth Momentum
Growth
EPS 1Y (TTM)6.11%
EPS 3Y25.23%
EPS 5Y17.64%
EPS Q2Q%2.15%
EPS Next Y2.38%
EPS Next 2Y6.94%
EPS Next 3Y8.03%
EPS Next 5Y9.78%
Revenue 1Y (TTM)4.35%
Revenue growth 3Y9.65%
Revenue growth 5Y8.37%
Sales Q2Q%5.61%
Revenue Next Year4.89%
Revenue Next 2Y5.65%
Revenue Next 3Y5.97%
Revenue Next 5Y7.02%
EBIT growth 1Y3.29%
EBIT growth 3Y19.7%
EBIT growth 5Y13.83%
EBIT Next Year11.69%
EBIT Next 3Y9.58%
EBIT Next 5Y8.84%
FCF growth 1Y4.27%
FCF growth 3Y32.04%
FCF growth 5Y13.84%
OCF growth 1Y25.43%
OCF growth 3Y31.09%
OCF growth 5Y15.17%