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

1.6%

GWW

2.2%

US Trade Distributors

0.4%

US Market


1 Year Return

12.2%

GWW

8.4%

US Trade Distributors

6.9%

US Market

Return vs Industry: GWW exceeded the US Trade Distributors industry which returned 8.4% over the past year.

Return vs Market: GWW exceeded the US Market which returned 6.9% over the past year.


Shareholder returns

GWWIndustryMarket
7 Day1.6%2.2%0.4%
30 Day6.1%2.0%-1.2%
90 Day16.0%8.4%-0.4%
1 Year14.5%12.2%10.4%8.4%9.3%6.9%
3 Year62.3%52.2%45.0%38.9%45.8%36.4%
5 Year44.9%30.4%31.3%21.9%62.9%45.1%

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 compared to its fair value and its price relative to the market?

21.1x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: GWW ($310.08) is trading above our estimate of fair value ($287.68)

Significantly Undervalued: GWW is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: GWW is poor value based on its PE Ratio (21.1x) compared to the Trade Distributors industry average (16.7x).

PE vs Market: GWW is poor value based on its PE Ratio (21.1x) compared to the US market (17.6x).


Price to Earnings Growth Ratio

Low PEG Ratio: GWW is poor value based on its PEG Ratio (3.1x)


Price to Book Ratio

PB vs Industry: GWW is overvalued based on its PB Ratio (8.8x) compared to the US Trade Distributors industry average (1.4x).


Next Steps

Future Growth

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

6.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GWW's forecast earnings growth (6.7% per year) is above the savings rate (2.7%).

Earnings vs Market: GWW's earnings (6.7% per year) are forecast to grow slower than the US market (14.5% per year).

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

Revenue vs Market: GWW's revenue (4.3% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: GWW's revenue (4.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: GWW's Return on Equity is forecast to be very high in 3 years time (40.1%).


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

Earnings Trend: GWW's earnings have declined by -2.1% per year over the past 5 years.

Accelerating Growth: GWW's earnings growth over the past year (5.2%) exceeds its 5-year average (-2.1% per year).

Earnings vs Industry: GWW earnings growth over the past year (5.2%) exceeded the Trade Distributors industry 0.9%.


Return on Equity

High ROE: Whilst GWW's Return on Equity (41.06%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets

ROA vs Industry: GWW has a higher Return on Assets than the Trade Distributors industry average last year.


Return on Capital Employed

ROCE Improving: GWW has improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

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


Financial Position Analysis

Short Term Liabilities: GWW's short term assets ($3.5B) exceeds its short term liabilities ($1.5B)

Long Term Liabilities: GWW's short term assets (3.5B) exceeds its long term liabilities (2.4B)


Debt to Equity History and Analysis

Debt Level: GWW's debt to equity ratio (104.6%) is considered high

Reducing Debt: GWW's debt to equity ratio has increased from 16.5% to 104.6% over the past 5 years.

Debt Coverage: GWW's debt is well covered by operating cash flow (50.3%).

Interest Coverage: GWW's interest payments on its debt are well covered by EBIT (18.5x coverage).


Balance Sheet

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

Debt Coverage by Assets: GWW's debt is covered by short term assets (assets are 1.562380x debt).


Next Steps

Dividend

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

1.86%

Current Dividend Yield


Dividend Yield vs Market

company1.9%marketbottom25%1.4%markettop25%3.7%industryaverage2.7%forecastin3Years2.0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: GWW's dividend (1.86%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: GWW's dividend (1.86%) is low compared to the top 25% of dividend payers in the US market (3.73%).

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (37.6%), GWW's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: GWW's dividends in 3 years are forecast to be well covered by earnings (32.4% payout ratio).


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?

3.0yrs

Average management tenure


CEO

DG Macpherson (51yo)

3yrs

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

Compensation vs. Market: DG's total compensation ($USD10.46M) is about average for companies of similar size in the US market ($USD11.18M).

Compensation vs Earnings: DG's compensation has increased by more than 20% in the past year.


Management Age and Tenure

3.0yrs

Average Tenure

50.5yo

Average Age

Experienced Management: GWW's management team is considered experienced (3 years average tenure).


Board Age and Tenure

11.5yrs

Average Tenure

65yo

Average Age

Experienced Board: GWW's board of directors are seasoned and experienced ( 11.5 years average tenure).


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

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: 19.8yrs
    • 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: 3yrs
    • Compensation: US$10.46m
  • David Rawlinson (43yo)

    President of Online Business

    • Tenure: 4.2yrs
  • 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: 1.4yrs
    • Compensation: US$4.31m
  • Irene Holman

    Vice President of Investor Relations

    • Tenure: 1.3yrs
  • 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: 20.8yrs
    • Compensation: US$318.57k
  • Stu Levenick (66yo)

    Lead Director

    • Tenure: 3.5yrs
    • Compensation: US$346.07k
  • Neil Novich (64yo)

    Independent Director

    • Tenure: 20.8yrs
    • Compensation: US$318.57k
  • V. Hailey (68yo)

    Independent Director

    • Tenure: 13.4yrs
    • Compensation: US$331.07k
  • jim Slavik (66yo)

    Independent Director

    • Tenure: 32.8yrs
    • Compensation: US$318.57k
  • Mike Roberts (68yo)

    Independent Director

    • Tenure: 13.7yrs
    • Compensation: US$333.57k
  • E. Santi (57yo)

    Independent Director

    • Tenure: 9.5yrs
    • Compensation: US$318.57k
  • Rod Adkins (60yo)

    Independent Director

    • Tenure: 5.3yrs
    • Compensation: US$318.57k
  • Beatriz Perez (49yo)

    Independent Director

    • Tenure: 2.3yrs
    • Compensation: US$318.57k
  • DG Macpherson (51yo)

    Chairman & CEO

    • Tenure: 3yrs
    • 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$16.921b
  • 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 Analysis2019/10/19 23:36
End of Day Share Price2019/10/18 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.