NYSE:GGG

Stock Analysis Report

Executive Summary

Graco Inc. designs, manufactures, and markets systems and equipment used to move, measure, control, dispense, and spray fluid and powder materials worldwide.

Rewards

Earnings grew by 0.9% over the past year

Pays a reliable dividend of 1.24%

Risk Analysis

No risks detected for GGG from our risk checks.


Snowflake Analysis

Flawless balance sheet with solid track record and pays a dividend.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

0.6%

GGG

0.1%

US Machinery

-1.1%

US Market


1 Year Return

19.2%

GGG

9.8%

US Machinery

17.9%

US Market

Return vs Industry: GGG exceeded the US Machinery industry which returned 9.8% over the past year.

Return vs Market: GGG exceeded the US Market which returned 17.9% over the past year.


Shareholder returns

GGGIndustryMarket
7 Day0.6%0.1%-1.1%
30 Day8.4%1.0%1.4%
90 Day16.7%1.1%6.9%
1 Year20.7%19.2%11.8%9.8%20.3%17.9%
3 Year90.3%83.0%38.6%29.8%47.8%38.3%
5 Year140.1%123.0%64.5%45.0%71.9%53.0%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

27.28x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: GGG ($56.34) is trading above our estimate of fair value ($46.72)

Significantly Below Fair Value: GGG is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: GGG is poor value based on its PE Ratio (27.3x) compared to the Machinery industry average (21.6x).

PE vs Market: GGG is poor value based on its PE Ratio (27.3x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: GGG is poor value based on its PEG Ratio (19.7x)


Price to Book Ratio

PB vs Industry: GGG is overvalued based on its PB Ratio (9.2x) compared to the US Machinery industry average (2.2x).


Next Steps

Future Growth

How is Graco forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

1.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GGG's forecast earnings growth (1.4% per year) is below the savings rate (1.7%).

Earnings vs Market: GGG's earnings (1.4% per year) are forecast to grow slower than the US market (14.1% per year).

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

Revenue vs Market: GGG's revenue (3.2% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: GGG's revenue (3.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GGG's Return on Equity is forecast to be high in 3 years time (27.9%)


Next Steps

Past Performance

How has Graco performed over the past 5 years?

5.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GGG has high quality earnings.

Growing Profit Margin: GGG's current net profit margins (20.9%) are higher than last year (20.6%).


Past Earnings Growth Analysis

Earnings Trend: GGG's earnings have grown by 5.9% per year over the past 5 years.

Accelerating Growth: GGG's earnings growth over the past year (0.9%) is below its 5-year average (5.9% per year).

Earnings vs Industry: GGG earnings growth over the past year (0.9%) exceeded the Machinery industry 0.9%.


Return on Equity

High ROE: GGG's Return on Equity (33.5%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Graco's financial position?


Financial Position Analysis

Short Term Liabilities: GGG's short term assets ($791.5M) exceed its short term liabilities ($285.3M).

Long Term Liabilities: GGG's short term assets ($791.5M) exceed its long term liabilities ($382.0M).


Debt to Equity History and Analysis

Debt Level: GGG's debt to equity ratio (16.8%) is considered satisfactory.

Reducing Debt: GGG's debt to equity ratio has reduced from 104.7% to 16.8% over the past 5 years.

Debt Coverage: GGG's debt is well covered by operating cash flow (243.4%).

Interest Coverage: GGG's interest payments on its debt are well covered by EBIT (32x coverage).


Balance Sheet

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

Debt Coverage by Assets: GGG's debt is covered by short term assets (assets are 4.6x debt).


Next Steps

Dividend

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

1.24%

Current Dividend Yield


Upcoming Dividend Payment

TodayFeb 23 2020Ex Dividend DateApr 17 2020Dividend Pay DateMay 06 202019 days from Ex DividendBuy in the next 54 days to receive upcoming dividend

Dividend Yield vs Market

Notable Dividend: GGG's dividend (1.24%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: GGG's dividend (1.24%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: GGG's dividends per share have been stable in the past 10 years.

Growing Dividend: GGG's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (31.7%), GGG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: GGG's dividends in 3 years are forecast to be well covered by earnings (27.6% payout ratio).


Next Steps

Management

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

2.3yrs

Average management tenure


CEO

Pat McHale (58yo)

12.7yrs

Tenure

US$6,414,317

Compensation

Mr. Patrick J. McHale, also known as Pat, serves as the Chief Executive Officer of Graco Minnesota Inc. Mr. McHale has been the Chief Executive Officer and President of Graco Inc. since June 12, 2007. He j ...


CEO Compensation Analysis

Compensation vs Market: Pat's total compensation ($USD6.41M) is about average for companies of similar size in the US market ($USD6.39M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Patrick McHale
President12.7yrsUS$6.41m0.12% $11.3m
Mark Sheahan
CFO & Treasurer1.7yrsUS$1.31m0.038% $3.6m
Karen Gallivan
Executive VP14.4yrsUS$1.18m0.029% $2.7m
Dale Johnson
President of Worldwide Contractor Equipment Division3yrsUS$1.20m0.13% $12.5m
David Lowe
President of Worldwide Industrial Products Division7.8yrsUS$1.21m0.33% $31.0m
Christian Rothe
President of Worldwide Applied Fluid Technologies Division1.7yrsUS$1.61m0.0079% $749.3k
Angela Wordell
Executive Vice President of Operations1.2yrsno data0.0063% $591.3k
David Ahlers
Executive Vice President of Human Resources & Corporate Communications9.8yrsno data0.037% $3.5m
Brian Zumbolo
President of Asia Pacific1.7yrsno data0.016% $1.6m
Jeffrey Johnson
President of New Ventures1.7yrsUS$1.38m0.017% $1.6m

2.3yrs

Average Tenure

58.5yo

Average Age

Experienced Management: GGG's management team is considered experienced (2.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Patrick McHale
President12.7yrsUS$6.41m0.12% $11.3m
Martha A. Morfitt
Independent Director24.3yrsUS$195.90k0.17% $16.2m
William Carroll
Independent Director20.7yrsUS$224.90k0.034% $3.2m
Jack Eugster
Independent Director16yrsUS$204.90k0.058% $5.5m
Lee Mitau
Independent Chairman12.7yrsUS$235.90k0.10% $9.4m
Robert Van Sant
Independent Director16yrsUS$204.90kno data
Jody Feragen
Independent Director4.4yrsUS$204.90k0.015% $1.4m
J. Gilligan
Independent Director19yrsUS$212.40k0.027% $2.6m
Eric Etchart
Independent Director9.2yrsUS$204.90k0.015% $1.4m
Emily White
Independent Director2yrsUS$204.90k0.0021% $196.8k

14.3yrs

Average Tenure

63.5yo

Average Age

Experienced Board: GGG's board of directors are seasoned and experienced ( 14.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: GGG insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Graco Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Graco Inc.
  • Ticker: GGG
  • Exchange: NYSE
  • Founded: 1926
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: US$9.460b
  • Shares outstanding: 167.92m
  • Website: https://www.graco.com

Number of Employees


Location

  • Graco Inc.
  • 88–11th Avenue Northeast
  • Minneapolis
  • Minnesota
  • 55413
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GGGNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1980
GA8DB (Deutsche Boerse AG)YesCommon StockDEEURJan 1980
GA8BRSE (Berne Stock Exchange)YesCommon StockCHCHFJan 1980

Biography

Graco Inc. designs, manufactures, and markets systems and equipment used to move, measure, control, dispense, and spray fluid and powder materials worldwide. The company’s Industrial segment offers proportioning systems to spray polyurethane foam and polyurea coatings; equipment that pumps, meters, mixes, and dispenses sealant, adhesive, and composite materials; and gel coat equipment, chop and wet-out systems, resin transfer molding systems, and applicators. It also provides liquid finishing equipment; paint circulating and supply pumps; paint circulating advanced control systems; plural component coating proportioners; spare parts and accessories; and powder finishing products to coat powder finishing on metals under the Gema and SAT brands. The company’s Process segment offers pumps to move and dispense chemicals, oil and natural gas, water, wastewater, petroleum, food, lubricants, and other fluids; pressure valves used in the oil and natural gas industry, other industrial processes, and research facilities; and chemical injection pumping solutions for injection of chemicals into producing oil wells and pipelines. It also supplies pumps, hose reels, meters, valves, and accessories for fast oil change facilities, service garages, fleet service centers, automobile dealerships, auto parts stores, truck builders, and heavy equipment service centers; and systems, components, and accessories for the automatic lubrication of bearings, gears, and generators in industrial and commercial equipment, compressors, turbines, and on- and off-road vehicles. The company’s Contractor segment offers sprayers to apply paint to walls and other structures; and viscous coatings to roofs, as well as markings on roads, parking lots, athletic fields, and floors. It primarily sells its products through distributors, original equipment manufacturers, and home center channels; and directly to end-users. The company was founded in 1926 and is headquartered in Minneapolis, Minnesota. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 00:54
End of Day Share Price2020/02/21 00:00
Earnings2019/12/27
Annual Earnings2019/12/27


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.