LSE:FERG

Stock Analysis Report

Executive Summary

Ferguson plc distributes plumbing and heating products in the United States, the United Kingdom, Canada, and Central Europe.


Snowflake Analysis

Adequate balance sheet and fair value.


Similar Companies

Share Price & News

How has Ferguson's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FERG has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.3%

FERG

9.4%

GB Trade Distributors

8.6%

GB Market


1 Year Return

-8.8%

FERG

-12.4%

GB Trade Distributors

-19.4%

GB Market

Return vs Industry: FERG underperformed the UK Trade Distributors industry which returned 14.6% over the past year.

Return vs Market: FERG underperformed the UK Market which returned 12.7% over the past year.


Shareholder returns

FERGIndustryMarket
7 Day0.3%9.4%8.6%
30 Day1.2%-7.9%-3.5%
90 Day1.0%-19.2%-23.0%
1 Year-0.8%-8.8%-8.9%-12.4%-15.5%-19.4%
3 Year48.8%30.7%11.8%1.5%-8.8%-19.9%
5 Year86.2%55.7%34.8%16.7%4.2%-19.0%

Price Volatility Vs. Market

How volatile is Ferguson's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Ferguson undervalued compared to its fair value and its price relative to the market?

30.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FERG (£54.65) is trading below our estimate of fair value (£78.87)

Significantly Below Fair Value: FERG is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: FERG is poor value based on its PE Ratio (17.2x) compared to the Trade Distributors industry average (16.3x).

PE vs Market: FERG is good value based on its PE Ratio (17.2x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: FERG is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: FERG is overvalued based on its PB Ratio (3.8x) compared to the GB Trade Distributors industry average (2x).


Next Steps

Future Growth

How is Ferguson forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

8.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FERG's forecast earnings growth (8.8% per year) is above the savings rate (1.2%).

Earnings vs Market: FERG's earnings (8.8% per year) are forecast to grow slower than the UK market (11.7% per year).

High Growth Earnings: FERG's earnings are forecast to grow, but not significantly.

Revenue vs Market: FERG's revenue (5.8% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: FERG's revenue (5.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FERG's Return on Equity is forecast to be high in 3 years time (21.8%)


Next Steps

Past Performance

How has Ferguson performed over the past 5 years?

10.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FERG has high quality earnings.

Growing Profit Margin: FERG's current net profit margins (4.4%) are lower than last year (5.5%).


Past Earnings Growth Analysis

Earnings Trend: FERG's earnings have grown by 10.3% per year over the past 5 years.

Accelerating Growth: FERG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: FERG had negative earnings growth (-13.9%) over the past year, making it difficult to compare to the Trade Distributors industry average (3.4%).


Return on Equity

High ROE: FERG's Return on Equity (21.9%) is considered high.


Next Steps

Financial Health

How is Ferguson's financial position?


Financial Position Analysis

Short Term Liabilities: FERG's short term assets ($6.7B) exceed its short term liabilities ($3.6B).

Long Term Liabilities: FERG's short term assets ($6.7B) exceed its long term liabilities ($2.8B).


Debt to Equity History and Analysis

Debt Level: FERG's debt to equity ratio (60.5%) is considered high.

Reducing Debt: FERG's debt to equity ratio has increased from 47.6% to 60.5% over the past 5 years.

Debt Coverage: FERG's debt is well covered by operating cash flow (34.5%).

Interest Coverage: FERG's interest payments on its debt are well covered by EBIT (24x coverage).


Balance Sheet


Next Steps

Dividend

What is Ferguson's current dividend yield, its reliability and sustainability?

2.69%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: FERG's dividend (2.69%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: FERG's dividend (2.69%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

Stable Dividend: FERG has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: FERG's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (46.8%), FERG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FERG's dividends in 3 years are forecast to be well covered by earnings (45.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure


CEO

John Martin (52yo)

2.67s

Tenure

US$4,138,300

Compensation

Mr. John W. Martin has been the Chief Executive Officer of Ferguson plc since September 1, 2016 and served as its Group Chief Financial Officer from April 01, 2010 to August 31, 2016. Mr. Martin has been a ...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD5.33M) is about average for companies of similar size in the UK market ($USD4.48M).

Compensation vs Earnings: John's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
John Martin
Group Chief Executive & Executive Director2.67yrsUS$4.14mno data
Michael Powell
Group CFO & Executive Director1.92yrsUS$1.18mno data
Kevin Murphy
CEO of USA & Executive Director1.75yrsUS$2.18mno data
Marie Wall
Group Director of Corporate Financeno datano datano data
Mike Sajor
Group Chief Information Officer1.33yrsno datano data
Mark Fearon
Director of Corporate Communications & Investor Relationsno datano datano data
Graham Middlemiss
Group Company Secretary & Interim Group General Counsel0.17yrno datano data
Michael Ward
Head of Corporate Communicationsno datano datano data
Simon Oakland
CEO of Canada & Central Europe and Group Head of Corporate Developmentno datano datano data
Samantha Long
Chief Human Resources Officer2.33yrsno datano data

1.8yrs

Average Tenure

50yo

Average Age

Experienced Management: FERG's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
John Martin
Group Chief Executive & Executive Director2.67yrsUS$4.14mno data
Michael Powell
Group CFO & Executive Director1.92yrsUS$1.18mno data
Kevin Murphy
CEO of USA & Executive Director1.75yrsUS$2.18mno data
Alan Murray
Senior Non Executive Director5.58yrsUS$79.80kno data
Gareth Davis
Chairman8.33yrsUS$383.00kno data
Nadia Shouraboura
Independent Non-Executive Director1.83yrsUS$66.70kno data
Darren Shapland
Independent Non-Executive Director5yrsUS$86.00kno data
Tessa Bamford
Independent Non-Executive Director8.17yrsUS$66.70kno data
Jacqueline Simmonds
Independent Non-Executive Director5yrsUS$83.00kno data
Catherine Halligan
Independent Non-Executive Director0.33yrno datano data

5.0yrs

Average Tenure

55yo

Average Age

Experienced Board: FERG's board of directors are considered experienced (5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Insufficient data to determine if shareholders have been diluted in the past year.


Top Shareholders

Company Information

Ferguson plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Ferguson plc
  • Ticker: FERG
  • Exchange: LSE
  • Founded: 1887
  • Industry: Trading Companies and Distributors
  • Sector: Capital Goods
  • Market Cap: UK£12.602b
  • Shares outstanding: 230.59m
  • Website: https://www.fergusonplc.com

Number of Employees


Location

  • Ferguson plc
  • 1020 Eskdale Road
  • Winnersh Triangle
  • Wokingham
  • Berkshire
  • RG41 5TS
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WOSC.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
FERGLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
24W2DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
FERGLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
24W5BST (Boerse-Stuttgart)YesOrdinary SharesDEEURJan 1992
FERG.YOTCPK (Pink Sheets LLC)SPONSRD ADS NEWUSUSDMay 2001
FERGLSE (London Stock Exchange)ORD GBP0.11403197GBGBPJun 2018

Biography

Ferguson plc distributes plumbing and heating products in the United States, the United Kingdom, Canada, and Central Europe. It offers plumbing and heating solutions to customers in the residential, municipal, civil and industrial markets, and commercial sectors for repair, maintenance, and improvement (RMI), as well as new construction markets. The company also distributes pipes, valves, fittings, hydrants, meters, and related water management products, as well as offers related services, such as water line tapping and pipe fusion services. In addition, it distributes heating, ventilation, air conditioning, refrigeration equipment, and parts and supplies to specialist contractors in the residential and commercial markets for repair and replacement; and PVF products to industrial customers. Further, the company fabricates and supplies fire protection systems and bespoke fabrication services to commercial contractors for new construction and renovation projects, as well as offers products, services, and solutions to enable maintenance of facilities across various RMI markets. Additionally, it offers supply chain management solutions for PVF; and industrial maintenance, repair, and operations specializing in delivering automation, instrumentation, engineered products, and turn-key solutions. The company also sells its home improvement products directly to consumers, as well as through a network of online stores. In addition, it operates its B2B business primarily under the Ferguson brand; and B2C business under the Build.com brand. Further, the company provides products and services for maintenance of multi-family properties, government agencies, hospitality, education, healthcare, and other facilities. It operates a network of 2,280 branches and 19 distribution centers. Ferguson plc was founded in 1887 and is headquartered in Zug, Switzerland. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/05/15 21:31
End of Day Share Price2019/05/14 00:00
Earnings2019/01/31
Annual Earnings2018/07/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.