NYSE:GWW

Stock Analysis Report

Executive Summary

W.W. Grainger, Inc. distributes maintenance, repair, and operating (MRO) products and services in the United States, Canada, Europe, Japan, Mexico, and internationally.

Snowflake

Fundamentals

Established dividend payer with adequate balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

6.2%

NYSE:GWW

5.4%

US Trade Distributors

1.3%

US Market


1 Year Return

-16.9%

NYSE:GWW

-8.2%

US Trade Distributors

2.0%

US Market

GWW underperformed the Trade Distributors industry which returned -8.5% over the past year.

GWW underperformed the Market in United States of America which returned 1.7% over the past year.


Share holder returns

GWWIndustryMarket
7 Day6.2%5.4%1.3%
30 Day9.8%10.8%3.9%
90 Day8.5%7.3%3.4%
1 Year-15.2%-16.9%-6.6%-8.2%4.2%2.0%
3 Year44.4%35.4%45.1%38.8%47.2%37.6%
5 Year29.6%16.6%23.7%14.9%60.5%42.9%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

20.11x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

W.W. Grainger's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).

W.W. Grainger's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).


Price Based on Earnings

W.W. Grainger is overvalued based on earnings compared to the US Trade Distributors industry average.

W.W. Grainger is overvalued based on earnings compared to the United States of America market.


Price Based on Expected Growth

W.W. Grainger is poor value based on expected growth next year.


Price Based on Value of Assets

W.W. Grainger is overvalued based on assets compared to the US Trade Distributors industry average.


Next Steps

Future Growth

How is W.W. Grainger expected to perform in the next 1 to 3 years based on estimates from 20 analysts?

6.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

W.W. Grainger's revenue is expected to grow by 4.3% yearly, however this is not considered high growth (20% yearly).

W.W. Grainger's earnings are expected to grow by 6.8% yearly, however this is not considered high growth (20% yearly).

W.W. Grainger's revenue growth is positive but not above the United States of America market average.

W.W. Grainger's earnings growth is positive but not above the United States of America market average.

W.W. Grainger's earnings growth is expected to exceed the low risk savings rate of 2.7%.


Earnings per Share Growth Estimates


Future Return on Equity

W.W. Grainger is expected to make outstanding use of shareholders’ funds in the future (Return on Equity greater than 40%).


Next Steps

Past Performance

How has W.W. Grainger performed over the past 5 years?

-2.1%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

W.W. Grainger's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.

W.W. Grainger's 1-year earnings growth exceeds its 5-year average (5.2% vs -2.1%)

W.W. Grainger's earnings growth has exceeded the US Trade Distributors industry average in the past year (5.2% vs 1.7%).


Return on Equity

Whilst W.W. Grainger made outstanding use of shareholders’ funds last year (Return on Equity greater than 40%), this is metric is skewed due to its high level of debt.


Return on Assets

W.W. Grainger used its assets more efficiently than the US Trade Distributors industry average last year based on Return on Assets.


Return on Capital Employed

W.W. Grainger has improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is W.W. Grainger's financial position?


Financial Position Analysis

W.W. Grainger is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

W.W. Grainger's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

W.W. Grainger's level of debt (104.6%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has increased over the past 5 years (16.5% vs 104.6% today).

Debt is well covered by operating cash flow (50.3%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 18.5x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is covered by short term assets, assets are 1.6x debt.


Next Steps

Dividend

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

2.10%

Expected Dividend Yield


Dividend Yield and Payments Analysis

W.W. Grainger's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.45%).

W.W. Grainger's dividend is below the markets top 25% of dividend payers in United States of America (3.67%).

Dividends per share have been stable in the past 10 years.

Dividends per share have increased over the past 10 years.


Current Payout to Shareholders

Dividends paid are well covered by earnings (2.7x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be well covered by earnings (3.1x coverage).


Next Steps

Management

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

2.9yrs

Average management tenure


CEO

DG Macpherson (51yo)

2.9yrs

Tenure

US$10,455,844

Compensation

Mr. Donald G. Macpherson, also known as DG, has been the Chief Executive Officer of W.W. Grainger, Inc. since October 01, 2016 and has been its Chairman since October 2017. Mr. Macpherson served as the Chi ...


CEO Compensation Analysis

DG's remuneration is about average for companies of similar size in United States of America.

DG's compensation has increased by more than 20% in the past year whilst earnings grew less than 20%.


Management Age and Tenure

2.9yrs

Average Tenure

50.5yo

Average Age

The tenure for the W.W. Grainger management team is about average.


Board Age and Tenure

11.4yrs

Average Tenure

65yo

Average Age

The average tenure for the W.W. Grainger board of directors is over 10 years, this suggests they are a seasoned and experienced board.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

SellUS$49,06417 Jun 19
Eric Tapia
EntityIndividual
Shares180
Max PriceUS$272.58

Ownership Breakdown


Management Team

  • John Howard (61yo)

    Senior VP & General Counsel

    • Tenure: 19.7yrs
    • Compensation: US$3.04m
  • Hugo Dubovoy

    VP & Corporate Secretary

    • Tenure: 0yrs
  • Deb Oler (64yo)

    Senior VP and President North America Sales & Service

    • Tenure: 0yrs
  • DG Macpherson (51yo)

    Chairman & CEO

    • Tenure: 2.9yrs
    • Compensation: US$10.46m
  • David Rawlinson (43yo)

    President of Online Business

    • Tenure: 4.1yrs
  • Paige Robbins (50yo)

    Senior VP & Chief Digital Officer

    • Tenure: 3.8yrs
    • Compensation: US$2.25m
  • Kathleen Carroll (50yo)

    Senior VP & Chief Human Resources Officer

    • Tenure: 0.8yrs
  • Tom Okray (56yo)

    Senior VP & CFO

    • Tenure: 1.3yrs
    • Compensation: US$4.31m
  • Irene Holman

    Vice President of Investor Relations

    • Tenure: 1.2yrs
  • Deidra Merriwether (50yo)

    Senior VP & President of U.S. Direct Sales and Strategic Initiatives

    • Tenure: 0yrs
    • Compensation: US$1.36m

Board Members

  • Brian Anderson (68yo)

    Independent Director

    • Tenure: 20.7yrs
    • Compensation: US$318.57k
  • Stu Levenick (66yo)

    Lead Director

    • Tenure: 3.4yrs
    • Compensation: US$346.07k
  • Neil Novich (64yo)

    Independent Director

    • Tenure: 20.7yrs
    • Compensation: US$318.57k
  • V. Hailey (68yo)

    Independent Director

    • Tenure: 13.3yrs
    • Compensation: US$331.07k
  • jim Slavik (66yo)

    Independent Director

    • Tenure: 32.7yrs
    • Compensation: US$318.57k
  • Mike Roberts (68yo)

    Independent Director

    • Tenure: 13.6yrs
    • Compensation: US$333.57k
  • E. Santi (57yo)

    Independent Director

    • Tenure: 9.4yrs
    • Compensation: US$318.57k
  • Rod Adkins (60yo)

    Independent Director

    • Tenure: 5.2yrs
    • Compensation: US$318.57k
  • Beatriz Perez (49yo)

    Independent Director

    • Tenure: 2.2yrs
    • Compensation: US$318.57k
  • DG Macpherson (51yo)

    Chairman & CEO

    • Tenure: 2.9yrs
    • Compensation: US$10.46m

Company Information

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


Key Information

  • Name: W.W. Grainger, Inc.
  • Ticker: GWW
  • Exchange: NYSE
  • Founded: 1927
  • Industry: Trading Companies and Distributors
  • Sector: Capital Goods
  • Market Cap: US$16.129b
  • Shares outstanding: 54.57m
  • Website: https://www.grainger.com

Number of Employees


Location

  • W.W. Grainger, Inc.
  • 100 Grainger Parkway
  • Lake Forest
  • Illinois
  • 60045
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GWWNYSE (New York Stock Exchange)YesCommon StockUSUSDJul 1971
GWWDB (Deutsche Boerse AG)YesCommon StockDEEURJul 1971
0IZILSE (London Stock Exchange)YesCommon StockGBUSDJul 1971

Biography

W.W. Grainger, Inc. distributes maintenance, repair, and operating (MRO) products and services in the United States, Canada, Europe, Japan, Mexico, and internationally. The company provides material handli ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/15 23:36
End of Day Share Price2019/09/13 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.