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Ferguson plc (FERG) vs W.W. Grainger, Inc. (GWW)

Ferguson plc and W.W. Grainger, Inc. are both Industrial Distribution companies. W.W. Grainger, Inc. is the larger, with a market value of $68.4B against $45.6B — 1.5× the size. Ferguson plc trades at the lower P/E: 19.6× against 31.4×. Ferguson plc grew revenue faster over the last twelve months: 9.38% against 9.12%. W.W. Grainger, Inc. has the higher net margin (11.2% vs 7.15%) and the higher return on invested capital (28.8% vs 18.8%). Both pay a dividend; Ferguson plc yields more (1.51% vs 0.65%). Across the 23 metrics below, Ferguson plc leads on 12 and W.W. Grainger, Inc. on 11.

Valuation

Metric FERG GWW Industrial Distribution median
P/E 19.61 31.39 25.87
P/S 1.39 3.52 1.08
P/B 7.37 15.12 3.44
Price to free cash flow 36.12 39.08 18.74
EV/EBITDA 13.65 21.12 13.98
EV/Sales 1.53 3.62 1.26
Earnings yield 5.10% 3.19% 3.49%
Free cash flow yield 2.77% 2.56% 4.52%

Profitability

Metric FERG GWW Industrial Distribution median
Gross margin 31.10% 39.43% 29.98%
Operating margin 9.73% 15.81% 7.44%
Net margin 7.15% 11.17% 4.55%
Free cash flow margin 3.85% 9.01% 4.24%
Return on equity 40.09% 49.73% 13.19%
Return on assets 12.69% 22.80% 5.00%
Return on invested capital 18.75% 28.76% 7.52%

Growth

Metric FERG GWW Industrial Distribution median
Revenue growth (TTM) 9.38% 9.12% 7.51%
EPS growth (last fiscal year) 9.28% (8.55%) (3.98%)
Revenue growth, 5-year CAGR 9.06% 8.75% 9.06%
Net income growth, 5-year CAGR 14.07% 19.67% 0.52%

Health

Metric FERG GWW Industrial Distribution median
Debt to equity 0.79 0.57 0.40
Current ratio 1.73 2.61 2.41
Net debt to EBITDA 1.17 0.69 1.17

Dividend

Metric FERG GWW Industrial Distribution median
Dividend yield 1.51% 0.65% 1.11%
Payout ratio 0.30 0.21 0.38

Size

Metric FERG GWW Industrial Distribution median
Market cap 45.59b 68.36b 5.10b

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