NYSE:GRA

Stock Analysis Report

Executive Summary

W. R. Grace & Co. produces and sells specialty chemicals and materials worldwide.

Rewards

Trading at 31.9% below its fair value

Earnings are forecast to grow 31.7% per year

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Reasonable growth potential with adequate balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

2.9%

GRA

1.6%

US Chemicals

1.5%

US Market


1 Year Return

-16.7%

GRA

-3.7%

US Chemicals

20.1%

US Market

Return vs Industry: GRA underperformed the US Chemicals industry which returned -3.7% over the past year.

Return vs Market: GRA underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

GRAIndustryMarket
7 Day2.9%1.6%1.5%
30 Day-11.7%-1.2%1.4%
90 Day-8.4%0.2%8.7%
1 Year-15.4%-16.7%10.1%-3.7%22.7%20.1%
3 Year-8.0%-11.7%29.9%5.2%50.1%40.5%
5 Year-18.4%-37.2%38.3%8.3%73.1%54.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is W. R. Grace undervalued compared to its fair value and its price relative to the market?

31.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GRA ($62.98) is trading below our estimate of fair value ($92.44)

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


Price To Earnings Ratio

PE vs Industry: GRA is poor value based on its PE Ratio (33.3x) compared to the Chemicals industry average (22.2x).

PE vs Market: GRA is poor value based on its PE Ratio (33.3x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: GRA is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: GRA is overvalued based on its PB Ratio (10.6x) compared to the US Chemicals industry average (2.2x).


Next Steps

Future Growth

How is W. R. Grace forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

31.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GRA's forecast earnings growth (31.7% per year) is above the savings rate (1.7%).

Earnings vs Market: GRA's earnings (31.7% per year) are forecast to grow faster than the US market (14.5% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: GRA's revenue (3.7% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: GRA's revenue (3.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GRA's Return on Equity is forecast to be very high in 3 years time (51.3%).


Next Steps

Past Performance

How has W. R. Grace performed over the past 5 years?

-4.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GRA has high quality earnings.

Growing Profit Margin: GRA's current net profit margins (6.5%) are lower than last year (8.7%).


Past Earnings Growth Analysis

Earnings Trend: GRA's earnings have declined by -4.2% per year over the past 5 years.

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

Earnings vs Industry: GRA had negative earnings growth (-24.6%) over the past year, making it difficult to compare to the Chemicals industry average (-14.6%).


Return on Equity

High ROE: Whilst GRA's Return on Equity (31.5%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is W. R. Grace's financial position?


Financial Position Analysis

Short Term Liabilities: GRA's short term assets ($1.1B) exceed its short term liabilities ($741.6M).

Long Term Liabilities: GRA's short term assets ($1.1B) do not cover its long term liabilities ($2.8B).


Debt to Equity History and Analysis

Debt Level: GRA's debt to equity ratio (484.4%) is considered high.

Reducing Debt: GRA's debt to equity ratio has reduced from 547.8% to 484.4% over the past 5 years.

Debt Coverage: GRA's debt is well covered by operating cash flow (20.1%).

Interest Coverage: GRA's interest payments on its debt are well covered by EBIT (5.8x coverage).


Balance Sheet

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

Debt Coverage by Assets: GRA's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

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

1.91%

Current Dividend Yield


Upcoming Dividend Payment

Purchase W. R. Grace before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company1.9%marketbottom25%1.4%markettop25%3.7%industryaverage2.2%forecastin3Years1.6%

Current dividend yield vs market & industry

Notable Dividend: GRA's dividend (1.91%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: GRA's dividend (1.91%) is low compared to the top 25% of dividend payers in the US market (3.69%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, GRA has been paying a dividend for less than 10 years.

Growing Dividend: GRA's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (57.1%), GRA's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: GRA's dividends in 3 years are forecast to be thoroughly covered by earnings (9.4% payout ratio).


Next Steps

Management

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

4.0yrs

Average management tenure


CEO

Hudson La Force (54yo)

1.3yrs

Tenure

US$2,867,727

Compensation

Mr. Hudson La Force, III, CPA, serves as the President and Chief Executive Officer at W. R. Grace & Co. and served as its Chief Operating Officer since November 8, 2018. As Chief Operating Officer, Mr. La  ...


CEO Compensation Analysis

Compensation vs Market: Hudson's total compensation ($USD2.87M) is below average for companies of similar size in the US market ($USD4.88M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Hudson La Force
President1.3yrsUS$2.87m0.14% $6.1m
Mark Shelnitz
Senior VP14.8yrsUS$1.41m0.11% $4.8m
Elizabeth Brown
Senior VP & Chief Human Resources Officer5.1yrsUS$1.12m0.022% $934.8k
Keith Cole
Senior Vice President of Government Relations0yrsUS$1.25m0.016% $687.6k
William Dockman
Senior VP & Chief Financial Officer1.8yrsno data0.013% $546.4k
Jeremy Rohen
Vice President of Corporate Development & Investor Relations1.8yrsno datano data
Richards Badmington
Vice President of Corporate Communications7.2yrsno datano data
Sandra Wisniewski
President of Grace Materials Technologies2.8yrsno datano data
Elyse Filon
VP & Treasurer8yrsno datano data
Thomas Petti
President of Refining Technologies0yrsno datano data

4.0yrs

Average Tenure

59.5yo

Average Age

Experienced Management: GRA's management team is considered experienced (4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Hudson La Force
President1.3yrsUS$2.87m0.14% $6.1m
Jeffry Quinn
Independent Director7.3yrsUS$194.66k0.016% $682.2k
Henry Slack
Independent Director0.8yrsno data0.0023% $96.7k
Mark Tomkins
Independent Director13.4yrsUS$206.99k0.028% $1.2m
Kathleen Reiland
Independent Director0.8yrsno datano data
Christopher Steffen
Non-executive Chairman0.3yrsUS$227.99k0.032% $1.3m
Diane Gulyas
Independent Director5.1yrsUS$203.07k0.016% $683.8k
Julie Fasone-Holder
Independent Director3.3yrsUS$196.74k0.0068% $284.1k

2.8yrs

Average Tenure

63yo

Average Age

Experienced Board: GRA's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


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.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

W. R. Grace & Co.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: W. R. Grace & Co.
  • Ticker: GRA
  • Exchange: NYSE
  • Founded: 1854
  • Industry: Specialty Chemicals
  • Sector: Materials
  • Market Cap: US$4.203b
  • Shares outstanding: 66.74m
  • Website: https://www.grace.com

Number of Employees


Location

  • W. R. Grace & Co.
  • 7500 Grace Drive
  • Columbia
  • Maryland
  • 21044
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GRANYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1992
GRADB (Deutsche Boerse AG)YesCommon StockDEEURJan 1992

Biography

W. R. Grace & Co. produces and sells specialty chemicals and materials worldwide. It operates through two segments, Grace Catalysts Technologies and Grace Materials Technologies. The Grace Catalysts Technologies segment offers fluid catalytic cracking (FCC) catalysts for the production of transportation fuels, such as gasoline and diesel fuels, and petrochemicals; FCC additives; and methanol-to-olefins catalysts for the conversion of methanol into petrochemical feeds, including ethylene and propylene. This segment also provides hydro processing catalysts used in process reactors to upgrade heavy oils into lighter products; polyolefin catalysts and chemical catalyst supports for the production of polypropylene and polyethylene thermoplastic resins; and chemical catalysts, as well as gas-phase polypropylene process technology to manufacture polypropylene products. The Grace Materials Technologies segment offers silica-based and silica-alumina-based materials for use in coatings, consumer, pharmaceutical, and chemical process. W. R. Grace & Co. was founded in 1854 and is headquartered in Columbia, Maryland. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 23:34
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.