WW GRAINGER INC (GWW)
US3848021040 - Common Stock
GWW gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 51 industry peers in the Trading Companies & Distributors industry. GWW scores excellent points on both the profitability and health parts. This is a solid base for a good stock. GWW is valied quite expensively at the moment, while it does show a decent growth rate.
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.
In the past 5 years GWW always reported a positive cash flow from operatings.
1.2 Ratios
GWW's Return On Assets of 22.45% is amongst the best of the industry. GWW outperforms 98.04% of its industry peers.
GWW has a better Return On Equity (58.72%) than 90.20% of its industry peers.
GWW's Return On Invested Capital of 31.03% is amongst the best of the industry. GWW outperforms 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 11.65%.
The last Return On Invested Capital (31.03%) for GWW is above the 3 year average (27.96%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 22.45% | ||
| ROE | 58.72% | ||
| ROIC | 31.03% |
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
The Profit Margin of GWW (11.10%) is better than 72.55% of its industry peers.
GWW's Profit Margin has improved in the last couple of years.
GWW has a better Operating Margin (15.72%) than 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 (39.42%) is better than 68.63% 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 | 15.72% | ||
| PM (TTM) | 11.1% | ||
| GM | 39.42% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), GWW is creating value.
GWW has less shares outstanding than it did 1 year ago.
GWW has less shares outstanding than it did 5 years ago.
GWW has a better debt/assets ratio than last year.
2.2 Solvency
GWW has an Altman-Z score of 11.16. This indicates that GWW is financially healthy and has little risk of bankruptcy at the moment.
GWW's Altman-Z score of 11.16 is amongst the best of the industry. GWW outperforms 96.08% of its industry peers.
GWW has a debt to FCF ratio of 1.45. This is a very positive value and a sign of high solvency as it would only need 1.45 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 1.45, GWW belongs to the best of the industry, outperforming 80.39% of the companies in the same industry.
GWW has a Debt/Equity ratio of 0.73. This is a neutral value indicating GWW is somewhat dependend on debt financing.
GWW has a Debt to Equity ratio (0.73) which is comparable to the rest of the industry.
Although GWW does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.73 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | 11.16 |
ROIC/WACC3.45
WACC8.99%
2.3 Liquidity
GWW has a Current Ratio of 2.88. This indicates that GWW is financially healthy and has no problem in meeting its short term obligations.
With a decent Current ratio value of 2.88, GWW is doing good in the industry, outperforming 68.63% of the companies in the same industry.
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.
With a decent Quick ratio value of 1.64, GWW is doing good in the industry, outperforming 76.47% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.88 | ||
| Quick Ratio | 1.64 |
3. Growth
3.1 Past
GWW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 23.53%, which is quite impressive.
GWW shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 17.02% yearly.
Looking at the last year, GWW shows a quite strong growth in Revenue. The Revenue has grown by 8.21% in the last year.
The Revenue has been growing slightly by 7.99% on average over the past years.
EPS 1Y (TTM)23.53%
EPS 3Y31.36%
EPS 5Y17.02%
EPS growth Q2Q16.67%
Revenue 1Y (TTM)8.21%
Revenue growth 3Y11.78%
Revenue growth 5Y7.99%
Revenue growth Q2Q5.13%
3.2 Future
The Earnings Per Share is expected to grow by 3.12% on average over the next years.
The Revenue is expected to grow by 6.13% on average over the next years.
EPS Next Y8.27%
EPS Next 2Y8.77%
EPS Next 3Y7.97%
EPS Next 5Y3.12%
Revenue Next Year5.8%
Revenue Next 2Y6.3%
Revenue Next 3Y6.54%
Revenue Next 5Y6.13%
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
Based on the Price/Earnings ratio of 25.57, the valuation of GWW can be described as expensive.
64.71% of the companies in the same industry are cheaper than GWW, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 24.80. GWW is around the same levels.
With a Price/Forward Earnings ratio of 23.62, GWW is valued on the expensive side.
Based on the Price/Forward Earnings ratio, GWW is valued a bit more expensive than the industry average as 66.67% of the companies are valued more cheaply.
GWW's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.57 | ||
| Fwd PE | 23.62 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GWW is valued a bit more expensive than the industry average as 70.59% of the companies are valued more cheaply.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GWW is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.03 | ||
| EV/EBITDA | 17.01 |
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)3.09
PEG (5Y)1.5
EPS Next 2Y8.77%
EPS Next 3Y7.97%
5. Dividend
5.1 Amount
GWW has a yearly dividend return of 0.77%, which is pretty low.
Compared to an average industry Dividend Yield of 1.66, GWW has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.40, GWW's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.77% |
5.2 History
On average, the dividend of GWW grows each year by 6.92%, 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)6.92%
Div Incr Years19
Div Non Decr Years19
5.3 Sustainability
GWW pays out 21.43% 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.
DP21.43%
EPS Next 2Y8.77%
EPS Next 3Y7.97%
WW GRAINGER INC
NYSE:GWW (4/19/2024, 11:05:10 AM)
937.2
-0.34 (-0.04%)
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 Cap46.04B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.77% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(12)
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Revenue beat(16)
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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 | 25.57 | ||
| Fwd PE | 23.62 | ||
| 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)3.09
PEG (5Y)1.5
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 22.45% | ||
| ROE | 58.72% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 15.72% | ||
| PM (TTM) | 11.1% | ||
| GM | 39.42% | ||
| 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 Turnover2.02
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.73 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.88 | ||
| Quick Ratio | 1.64 | ||
| 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)
Growth
EPS 1Y (TTM)23.53%
EPS 3Y31.36%
EPS 5Y
EPS growth Q2Q
EPS Next Y8.27%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)8.21%
Revenue growth 3Y11.78%
Revenue growth 5Y
Revenue growth 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