WW GRAINGER INC (GWW)

US3848021040 - Common Stock

906.79  -14.28 (-1.55%)

After market: 906.79 0 (0%)

Fundamental Rating

6

We assign a fundamental rating of 6 out of 10 to GWW. 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. While showing a medium growth rate, GWW is valued expensive at the moment.



9

1. Profitability

1.1 Basic Checks

GWW had positive earnings in the past year.
In the past year GWW had a positive cash flow from operations.
GWW had positive earnings in each of the past 5 years.
GWW had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

Looking at the Return On Assets, with a value of 21.65%, GWW belongs to the top of the industry, outperforming 98.04% of the companies in the same industry.
Looking at the Return On Equity, with a value of 56.86%, GWW belongs to the top of the industry, outperforming 90.20% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 33.23%, GWW belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
GWW had an Average Return On Invested Capital over the past 3 years of 27.96%. This is significantly above the industry average of 11.19%.
The 3 year average ROIC (27.96%) for GWW is below the current ROIC(33.23%), indicating increased profibility in the last year.
Industry RankSector 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

With a decent Profit Margin value of 10.94%, GWW is doing good in the industry, outperforming 72.55% of the companies in the same industry.
In the last couple of years the Profit Margin of GWW has grown nicely.
GWW's Operating Margin of 15.52% is fine compared to the rest 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.
GWW has a Gross Margin of 39.29%. This is in the better half of the industry: GWW outperforms 66.67% of its industry peers.
GWW's Gross Margin has been stable in the last couple of years.
Industry RankSector 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%

8

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.
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 10.65. This indicates that GWW is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of GWW (10.65) is better than 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.
GWW has a better Debt to FCF ratio (1.29) than 76.47% of its industry peers.
A Debt/Equity ratio of 0.56 indicates that GWW is somewhat dependend on debt financing.
GWW's Debt to Equity ratio of 0.56 is in line compared 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 RankSector Rank
Debt/Equity 0.56
Debt/FCF 1.29
Altman-Z 10.65
ROIC/WACC3.86
WACC8.62%

2.3 Liquidity

A Current Ratio of 2.19 indicates that GWW has no problem at all paying its short term obligations.
GWW has a Current ratio (2.19) which is in line with 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.
The Quick ratio of GWW (1.33) is comparable to the rest of the industry.
Industry RankSector Rank
Current Ratio 2.19
Quick Ratio 1.33

4

3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 13.82% 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 17.02% on average per year.
The Revenue has been growing slightly by 6.06% in the past year.
GWW shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.99% yearly.
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

GWW is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.12% yearly.
GWW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.97% yearly.
EPS Next Y8.27%
EPS Next 2Y8.84%
EPS Next 3Y7.82%
EPS Next 5Y5.12%
Revenue Next Year5.44%
Revenue Next 2Y6.16%
Revenue Next 3Y6.65%
Revenue Next 5Y5.97%

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 decreasing.

2

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 24.74 indicates a rather expensive valuation of GWW.
Based on the Price/Earnings ratio, GWW is valued a bit more expensive than 60.78% of the companies in the same industry.
GWW is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.39, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 20.89, which indicates a rather expensive current valuation of GWW.
Based on the Price/Forward Earnings ratio, GWW is valued a bit more expensive than 66.67% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 19.91, GWW is valued at the same level.
Industry RankSector Rank
PE 24.74
Fwd PE 20.89

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, GWW is valued a bit more expensive than the industry average as 68.63% 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 RankSector Rank
P/FCF 25.11
EV/EBITDA 16.43

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)2.99
PEG (5Y)1.45
EPS Next 2Y8.84%
EPS Next 3Y7.82%

5

5. Dividend

5.1 Amount

With a yearly dividend of 0.89%, GWW is not a good candidate for dividend investing.
GWW's Dividend Yield is comparable with the industry average which is at 1.88.
With a Dividend Yield of 0.89, GWW pays less dividend than the S&P500 average, which is at 2.39.
Industry RankSector Rank
Dividend Yield 0.89%

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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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.
The dividend of GWW is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP22.54%
EPS Next 2Y8.84%
EPS Next 3Y7.82%

WW GRAINGER INC

NYSE:GWW (6/14/2024, 7:13:16 PM)

After market: 906.79 0 (0%)

906.79

-14.28 (-1.55%)

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 Cap44.50B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 0.89%
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 RankSector Rank
PE 24.74
Fwd PE 20.89
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)2.99
PEG (5Y)1.45
Profitability
Industry RankSector 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 RankSector 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