LSE:GRI

Stock Analysis Report

Executive Summary

Grainger plc, together with its subsidiaries, owns, develops, manages, and rents residential properties in the United Kingdom.

Snowflake

Fundamentals

Good value with acceptable track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

4.2%

GRI

3.3%

GB Real Estate

2.0%

GB Market


1 Year Return

-8.0%

GRI

2.2%

GB Real Estate

3.3%

GB Market

Return vs Industry: GRI underperformed the UK Real Estate industry which returned 2.2% over the past year.

Return vs Market: GRI underperformed the UK Market which returned 3.3% over the past year.


Share holder returns

GRIIndustryMarket
7 Day4.2%3.3%2.0%
30 Day3.9%2.7%-1.0%
90 Day5.3%3.1%-1.7%
1 Year4.0%-8.0%6.4%2.2%8.3%3.3%
3 Year36.4%16.4%-4.8%-11.4%19.0%4.5%
5 Year74.2%44.6%19.3%4.5%38.4%8.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Grainger undervalued based on future cash flows and its price relative to the stock market?

>50%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Undervalued: GRI (£2.56) is trading below our estimate of fair value (£7.01)

Significantly Undervalued: GRI is trading below fair value by more than 20%.


Price Based on Earnings

PE vs Industry: GRI is poor value based on its PE Ratio (13x) compared to the Real Estate industry average (11.2x).

PE vs Market: GRI is good value based on its PE Ratio (13x) compared to the UK market (16.4x).


Price Based on Expected Growth

Low PEG Ratio: GRI is good value based on its PEG Ratio (0.7x)


Price Based on Value of Assets

PB vs Industry: GRI is overvalued based on its PB Ratio (1.2x) compared to the GB Real Estate industry average (1.1x).


Next Steps

Future Growth

How is Grainger expected to perform in the next 1 to 3 years based on estimates from 4 analysts?

19.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: GRI's forecast earnings growth (19.7% per year) is above the savings rate (1.2%).

Earnings vs Market: GRI's earnings (19.7% per year) are forecast to grow faster than the UK market (12.3% per year).

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

Revenue vs Market: GRI's revenue is expected to decline over the next 3 years (-12% per year).

High Growth Revenue: GRI's revenue is forecast to decline over the next 3 years (-12%).


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: GRI's Return on Equity is forecast to be low in 3 years time (6.6%).


Next Steps

Past Performance

How has Grainger performed over the past 5 years?

7.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: GRI's earnings have grown by 7.3% per year over the past 5 years.

Accelerating Growth: GRI's earnings growth over the past year (15.5%) exceeds its 5-year average (7.3% per year).

Earnings vs Industry: GRI earnings growth over the past year (15.5%) exceeded the Real Estate industry 8%.


Return on Equity

High ROE: GRI's Return on Equity (8%) is considered low.


Return on Assets

ROA vs Industry: GRI's Return on Assets is below or equal to the Real Estate industry average last year.


Return on Capital Employed

ROCE Improving: GRI's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Grainger's financial position?


Financial Position Analysis

Short Term Liabilities: GRI's short term assets (£931.5M) exceeds its short term liabilities (£90.0M)

Long Term Liabilities: GRI's short term assets (931.5M) do not cover its long term liabilities (1.2B)


Debt to Equity History and Analysis

Debt Level: GRI's debt to equity ratio (103.6%) is considered high

Reducing Debt: GRI's debt to equity ratio has reduced from 209.9% to 103.6% over the past 5 years.

Debt Coverage: GRI's debt is not well covered by operating cash flow (13.4%).

Interest Coverage: GRI's interest payments on its debt are well covered by EBIT (5.4x coverage).


Balance Sheet

Inventory Level: GRI has a high level of physical assets or inventory.

Debt Coverage by Assets: GRI's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

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

2.86%

Expected Dividend Yield


Dividend Yield vs Market

company2.1%marketbottom25%2.0%markettop25%5.4%industryaverage3.0%forecastin3Years2.9%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: GRI's dividend (2.05%) is higher than the bottom 25% of dividend payers in the UK market (2%).

High Dividend: GRI's dividend (2.05%) is low compared to the top 25% of dividend payers in the UK market (5.42%).

Stable Dividend: GRI's dividend payments have been volatile in the past 10 years.

Growing Dividend: GRI's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (26.7%), GRI's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: GRI's dividends in 3 years are forecast to be covered by earnings (56.2% payout ratio).


Next Steps

Management

What is the CEO of Grainger's salary, the management and board of directors tenure and is there insider trading?

3.7yrs

Average management tenure


CEO

Helen Gordon (59yo)

3.8yrs

Tenure

UK£1

Compensation

Ms. Helen C. Gordon, MRICS, has been an Independent Non-Executive Director of Derwent London Plc since January 1, 2018. She has been the Chief Executive Officer at Grainger Plc since January 01, 2016. Ms.  ...


CEO Compensation Analysis

Compensation vs. Market: Helen's total compensation ($USD1.27) is too low to compare against companies of similar size in the UK market ($USD1.88M).

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


Management Age and Tenure

3.7yrs

Average Tenure

59yo

Average Age

Experienced Management: GRI's management team is considered experienced (3.7 years average tenure).


Board Age and Tenure

2.7yrs

Average Tenure

57yo

Average Age

Experienced Board: GRI's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


Insider Trading

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


Recent Insider Transactions

BuyUK£30310 Apr 19
Helen Gordon
EntityIndividual
Role
Chief Executive Officer
CEO & Executive Director
Shares126
Max PriceUK£2.41
BuyUK£29810 Apr 19
Vanessa Simms
EntityIndividual
Role
Member of the Board of Directors
CFO & Executive Director
Shares124
Max PriceUK£2.41
SellUK£32,66614 Feb 19
Helen Gordon
EntityIndividual
Role
Chief Executive Officer
CEO & Executive Director
Shares13,465
Max PriceUK£2.43
SellUK£13,53514 Feb 19
Vanessa Simms
EntityIndividual
Role
Member of the Board of Directors
CFO & Executive Director
Shares5,579
Max PriceUK£2.43
BuyUK£9,92111 Dec 18
Helen Gordon
EntityIndividual
Role
Chief Executive Officer
CEO & Executive Director
Shares4,747
Max PriceUK£2.09

Ownership Breakdown


Management Team

  • Helen Gordon (59yo)

    CEO & Executive Director

    • Tenure: 3.8yrs
    • Compensation: UK£1.00
  • David Prescott

    Director of Strategy & Corporate Finance

    • Tenure: 1.2yrs
  • Kurt Mueller

    Director of Corporate Affairs

    • Tenure: 0yrs
  • Adam McGhin

    Group General Counsel & Company Secretary

    • Tenure: 0yrs
  • David Smith (60yo)

    Group Accounting Director

    • Tenure: 0yrs
  • Vanessa Simms (43yo)

    CFO & Executive Director

    • Tenure: 3.7yrs
    • Compensation: UK£827.00k
  • Andrew Saunderson

    Director of Investment and PDMR

    • Tenure: 0yrs
  • Anish Thobhani

    Customer Operations Director

    • Tenure: 0yrs

Board Members

  • Justin Read (57yo)

    Non-Executive Director

    • Tenure: 2.7yrs
    • Compensation: UK£53.00k
  • Mark Clare (62yo)

    Non-Executive Chairman of the Board

    • Tenure: 2.7yrs
    • Compensation: UK£165.00k
  • Andrew C. Carr-Locke (65yo)

    Senior Independent Director

    • Tenure: 1.7yrs
    • Compensation: UK£61.00k
  • Helen Gordon (59yo)

    CEO & Executive Director

    • Tenure: 3.8yrs
    • Compensation: UK£1.00
  • Rob Wilkinson (46yo)

    Non-­Executive Director

    • Tenure: 4yrs
    • Compensation: UK£47.00k
  • Vanessa Simms (43yo)

    CFO & Executive Director

    • Tenure: 3.7yrs
    • Compensation: UK£827.00k
  • Janette Bell (55yo)

    Director

    • Tenure: 0.7yrs

Company Information

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


Key Information

  • Name: Grainger plc
  • Ticker: GRI
  • Exchange: LSE
  • Founded: 1912
  • Industry: Real Estate Operating Companies
  • Sector: Real Estate
  • Market Cap: UK£1.561b
  • Shares outstanding: 609.72m
  • Website: https://www.graingerplc.co.uk

Number of Employees


Location

  • Grainger plc
  • Citygate
  • St James' Boulevard
  • Newcastle upon Tyne
  • Tyne and Wear
  • NE1 4JE
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GRILSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
GRILBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
1U4DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992

Biography

Grainger plc, together with its subsidiaries, owns, develops, manages, and rents residential properties in the United Kingdom. The company operates through three segments: Residential, Development, and Fun ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/13 20:34
End of Day Share Price2019/10/11 00:00
Earnings2019/03/31
Annual Earnings2018/09/30


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.

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