Lake Forest, Illinois-based W.W. Grainger, Inc. (GWW) distributes maintenance, repair, and operating products and services primarily in North America and internationally. The company has a market cap of $62.4 billion and operates through two segments, High-Touch Solutions North America and Endless Assortment, and provides safety, security, material handling and storage equipment, pumps and plumbing equipment, cleaning and maintenance, and metalworking and hand tools.
Companies with a market cap of $10 billion or more are typically referred to as “large-cap stocks.” GWW fits perfectly into that category, with its market cap exceeding this threshold and reflecting its substantial size and influence in the industrial distribution industry.
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GWW stock reached its 52-week high of $1419.91 on July 17 and has slipped 9.2% from that peak. The stock has fallen 1.2% over the past three months, underperforming the Nasdaq Composite ($NASX), which grew 1.9% over the same period.
www.barchart.comOver the longer term, the scenario changes. GWW is up 29.2% over the past 52 weeks, rallying NASX's 21.2% return over the same period.
GWW has been trading above its 200-day moving average since last year and below its 50-day moving average since the start of August.
www.barchart.comGWW has impressed analysts and investors with its impressive fundamentals and finances. The company’s operating margin of 14.8% is excellent and indicates an efficient business model, with a steady rise over the last five years fueled by some leverage on its fixed costs. Moreover, its annual earnings per share growth of 20.7% over the past five years has outpaced its revenue gains, boosted by share repurchases. Additionally, its return on capital of 37.8% is above its industry average and highlights the company’s capability to invest in high-return ventures.
When stacked against its peer in the industrial distribution industry, Fastenal Company (FAST) shares have grown 2.5% over the past 52 weeks, lagging behind GWW’s performance over the same time period.
Wall Street’s view of GWW stock is skeptical. Among the 18 analysts covering the stock, the overall consensus rating is “Hold.” Its mean price target of $1322 offers a 2.5% upside potential.
On the date of publication, Aritra Gangopadhyay did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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