WW Grainger, Inc. (NYSE:GWW)

 

WW Grainger  is a distributor of industrial supplies serving maintenance, repair and operation (lighting, plumbing, tools, safety supplies, etc.). Grainger aims to increase sales by reaching new customers and encouraging them to treat Grainger as a one-stop shop for hardware purchases, including purchases they would normally make from a specialist distributor.

During 2009, Grainger acquired two companies in the United States, one in Canada, one in India, and a majority stake in a company in Japan. Grainger divides its operations into three segments: United States, Canada, and Other Operations, which include the Mexico, THE Panama, Japan, Puerto Rico and the ChinaBy expanding its business overseas, Grainger is reducing its reliance on U.S. sales.

The current yield, with 1.20%, indicates that the stock is quite expensive. Moreover, it is below its long-term average, which is already modest (1.85%). On the other hand there average annual dividend growth GWW is particularly efficient, with 17.91%. The history of successive increases in royalties is also remarkable, with 40 years. Despite this constant and sustained progression, the distribution ratio is more than adequate, with 29.10. GWW therefore still has room to grow its dividend in the future, even in the event of a fall in profits.

The title displays very high volatility, with 26.04%. Nevertheless, the sensitivity to the market remains correct, with a beta of 0.93. As is often the case, volatility is correlated with performance, which is confirmed at GWW. We can see in the graph below the excellent performance of the title during the famous "lost decade" 2000-2010.

In return for this high volatility, GWW offers a good coverage against currency risk, with $risk of -0.70. A fall in the dollar of the title is thus generally accompanied by an increase in the value of GWW in CHF.

Taking these fundamentals into account, we consider GWW as a stock to hold or watch for possible future purchase.

Sources: wikinvest.com, yahoo.com, dividends.ch