The Company in a Nutshell
- The firm generated roughly $1.7 billion in sales and $425 million in operating income in 2018.
- GGG has become a master at handling difficult-to-move fluids which gives them a great niche.
- The bulk of its sales come from the construction market (45%), and industrial/machinery (19%).
- We do not cover Graco at the moment.
Date Reviewed | N/A |
Company Name | Graco Inc |
Symbol | GGG |
Sector | Industrials |
Industry | Specialty Industrial Machinery |
Beta | 0.798 |
PRO Rating | 4 |
Dividend Safety | 4 |
Business Model
Graco Inc. is a manufacturing company. It supplies technology and expertise for the management of fluids and coatings in industrial and commercial applications. It operates through three segments: Contractor, Industrial and Process. Contractor segment offers sprayers that apply paint to walls and other structures, with product models for users ranging from do-it-yourself homeowners to professional contractors. It also manufactures two-component proportioning systems that are used to spray polyurethane foam (spray foam) and polyurea coatings. Industrial segment includes the Industrial and Powder divisions. The Industrial segment markets equipment and solutions for moving and applying paints, coatings, sealants, adhesives and other fluids. Process segment includes the Process and Lubrication divisions. The Process segment markets pumps, valves, meters and accessories to move and dispense chemicals, oil and natural gas, water, wastewater, petroleum, food, lubricants and other fluids.
Current price | 85.88 |
ROE | 24.80 % |
ROIC | 31.20 % |
Shareholder Yield | -0.05 % |
5-Yr Total Return | 93.30 % |
1-Yr Total Return | 13.00 % |
Next Earnings Date | 10-23-24 |
Latest Quarter Information
What the CEO said:
Strength in the Contractor segment this quarter was not enough to offset declines elsewhere, resulting in overall sales performance that was below our expectations. New product introductions in Contractor were well-received and led to sales growth. Declines in Asia Pacific were driven largely by the China market, where softening demand is negatively impacting our sealant and adhesives, powder coating equipment and semiconductor businesses. Operating earnings performance was strong for the quarter with an expansion of more than 100 basis points when compared to our second quarter last year.
What we say:
08-13-2024, GGG's sales declined by 1% YoY, with a fall in - Process: ~$128M (-9% Y/Y), Industrial: ~$156M (-5%), while Contractor sales of ~$270M was up 5%. Regionally, sales grew in the Americas (+9%) and Asia Pacific (+7%) but decreased in EMEA (-8%). Total operating earnings increased by 3% gaining from higher gross profit margin rate in the quarter. Sales volume was lower and operating expenses were higher during the second quarter. Given challenging economic conditions, GGG lowered its full-year 2024 organic revenue to decline in low single-digitsdigits.
Investment Thesis
Dividend Triangle
5-Yr Rev. Growth | 5.85 % |
5-Yr EPS Growth | 8.35 % |
5-Yr Div Growth | 12.15 % |
Potential Risks
Debt/Equity | 0.00 |
Financial Debt to EBITDA (TTM) | 0.05 |
Current Ratio (Quarterly) | 3.45 |
Credit Score | 100 |
Dividend Growth Perspective
Dividend ($) | 1.02 |
Dividend Yield Fwd | 1.20 % |
Dividend Frequency | Quarterly |
Average 5-Yr Yield | 1.15 % |
Payout Ratio (%) | 31.80 |
Cash Payout Ratio (%) | 35.90 |
DGR 1-Yr | 8.50 |
DGR 3-Yr | 10.35 |
DGR 5-Yr | 12.15 |
DGR Streak | 26 |
Chowder Score | 13.35 |
Next DVD PMT | 11-06-24 |
Valuation
(Data for `ddm_recent_annual_dividend` field are missing to build DDM tables)
Video Tutorial: How to Read the Stock Cards DDM Valuation
Market Cap | 14 B |
PE Ratio | 28.95 |
Fwd PE | 26.90 |
Price to Book Ratio | 5.85 |
DDM Valuation | N/A |
Average 5-Yr PE | 29.16 |
Value Score | 21 |
- All financial metrics are updated weekly.
- The DSR PRO rating and Dividend Safety Score are updated quarterly.
- The analysis (investment thesis, risk potential, dividend growth perspective and DDM calculation) is reviewed every 6 months.
- The PDF format includes only comments (no metrics) and is reviewed every 6 months.