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Graco Inc (GGG)



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Upturn Advisory Summary
02/11/2025: GGG (1-star) is currently NOT-A-BUY. Pass it for now.
Analysis of Past Performance
Type Stock | Historic Profit -0.84% | Avg. Invested days 44 | Today’s Advisory PASS |
Upturn Star Rating ![]() ![]() | Upturn Advisory Performance ![]() | Stock Returns Performance ![]() |
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Key Highlights
Company Size Large-Cap Stock | Market Capitalization 14.51B USD | Price to earnings Ratio 30.14 | 1Y Target Price 91.5 |
Price to earnings Ratio 30.14 | 1Y Target Price 91.5 | ||
Volume (30-day avg) 773890 | Beta 0.81 | 52 Weeks Range 76.77 - 93.63 | Updated Date 02/10/2025 |
52 Weeks Range 76.77 - 93.63 | Updated Date 02/10/2025 | ||
Dividends yield (FY) 1.28% | Basic EPS (TTM) 2.85 |
Revenue by Products
Product revenue - Year on Year
Revenue by Geography
Geography revenue - Year on Year
Earnings Date
Report Date 2025-01-27 | When After Market | Estimate 0.77 | Actual 0.64 |
Profitability
Profit Margin 22.87% | Operating Margin (TTM) 27.89% |
Management Effectiveness
Return on Assets (TTM) 12.5% | Return on Equity (TTM) 20.73% |
Valuation
Trailing PE 30.14 | Forward PE 28.17 | Enterprise Value 13688988532 | Price to Sales(TTM) 6.81 |
Enterprise Value 13688988532 | Price to Sales(TTM) 6.81 | ||
Enterprise Value to Revenue 6.48 | Enterprise Value to EBITDA 20.16 | Shares Outstanding 168850000 | Shares Floating 167073278 |
Shares Outstanding 168850000 | Shares Floating 167073278 | ||
Percent Insiders 0.92 | Percent Institutions 89.53 |
AI Summary
Graco Inc. Stock Overview
Company Profile:
History and Background: Founded in 1926, Graco Inc. is a global manufacturer of fluid handling equipment and systems. Initially specializing in lubrication equipment, Graco has expanded its product portfolio over the years to encompass various sectors, including industrial, commercial, and consumer markets. The company operates through four segments: Industrial, Contractor, Lubrication, and Process.
Core Business Areas: Graco Inc. focuses on manufacturing and distributing a diverse range of products, including:
- Fluid handling equipment: Pumps, sprayers, meter/mixers, and dispensing systems for various applications, including painting, coating, lubrication, sealant application, and adhesive dispensing.
- Contractor equipment: Power tools, sprayers, and other equipment for use in construction, renovation, and maintenance activities.
- Lubrication equipment: Dispensers, pumps, and controllers for oil and grease lubrication in automotive, industrial, and commercial settings.
- Process equipment: Pumps, valves, and other components for chemical processing, food and beverage production, and other industrial applications.
Leadership and Corporate Structure: Graco Inc. is led by President and CEO David A. Koch, supported by a team of experienced executives overseeing various divisions and functions. The company maintains a decentralized structure with independent business units catering to different market segments.
Top Products and Market Share:
Top Products: Graco's portfolio includes several leading products:
- Airless sprayers: Graco is a recognized leader in airless sprayers, holding a significant market share in various regions.
- Contractor power tools: The company offers a range of power tools for various applications, including drywall finishing, sanding, and painting.
- Lubrication equipment: Graco is a major supplier of lubrication equipment for the automotive and industrial sectors.
- Meter/mixers and dispensing systems: Graco provides advanced dispensing solutions for diverse industries like construction, adhesives, and food processing.
Market Share: Graco holds a leading market share in airless sprayers globally, estimated to be around 40%. The company also commands a significant market share in other product categories, particularly within the US market.
Product Performance and Market Reception: Graco's products are generally well-received by customers, with positive reviews for quality, reliability, and performance. The company actively invests in product development and innovation, which contributes to its competitive edge.
Total Addressable Market:
Market Size: The global market for fluid handling equipment is estimated to be around USD 8.5 billion, with the US market accounting for a significant portion. The market for related products like contractor power tools and lubrication equipment further expands the total addressable market for Graco Inc.
Financial Performance:
Recent Performance: Graco Inc. has demonstrated consistent financial performance in recent years. The company reported revenue of USD 1.36 billion in 2022, with net income of USD 140.4 million. Profit margins remained healthy, while earnings per share (EPS) came in at USD 3.75.
Year-over-Year Comparison: Compared to 2021, Graco's revenue and net income witnessed modest growth. However, profit margins and EPS showed a slight decline, potentially due to increased operating expenses.
Cash Flow and Balance Sheet: Graco maintains a healthy cash flow position, with operating cash flow exceeding USD 100 million in 2022. The company's balance sheet also reflects a solid financial condition, with manageable debt levels and sufficient liquidity.
Dividends and Shareholder Returns:
Dividend History: Graco Inc. has a consistent dividend payment history, with a current annualized dividend of USD 1.76 per share. The company's dividend yield stands at approximately 1.3%, while the payout ratio is around 47%.
Shareholder Returns: Over the past year, Graco's stock has generated a total return of around 15%, outperforming the broader market. Over longer timeframes, shareholder returns have been consistently positive, demonstrating the company's value creation for investors.
Growth Trajectory:
Historical Growth: Graco Inc. has experienced steady growth over the past decade, with revenue increasing by roughly 50% during this period. The company's earnings have also grown steadily, reflecting its operational efficiency and market expansion efforts.
Future Projections: Future growth prospects for Graco appear promising. The company is poised to benefit from favorable industry trends, including increasing demand for fluid handling equipment in various sectors. Additionally, Graco's continued focus on product innovation and strategic acquisitions could further drive growth in the years to come.
Market Dynamics:
Industry Trends: The fluid handling equipment market is experiencing continued growth, driven by factors such as rising industrial automation, infrastructure development, and increasing demand for specialized equipment. Technological advancements like digitalization and IoT integration are further shaping the market landscape.
Graco's Positioning: Graco is well-positioned within the industry, owing to its strong brand recognition, diverse product portfolio, and established global presence. The company's focus on innovation and customer-centric approach ensures its continued adaptability to changing market dynamics.
Competitors:
Key Competitors: Graco competes with several major players in the fluid handling equipment market, including:
- ITW (ITW): A diversified industrial company with a strong presence in spray equipment and dispensing systems.
- Nordson Corporation (NDSN): A leading provider of precision dispensing and coating solutions for various industries.
- SPX Corporation (SPXC): A diversified industrial conglomerate with a focus on fluid handling equipment for various applications.
Market Share: Graco holds a market share advantage over several competitors, particularly in airless sprayers and other product categories. However, competition remains intense, demanding continuous innovation and strategic positioning to maintain market leadership.
Challenges and Opportunities:
Key Challenges: Graco faces challenges such as fluctuating commodity prices, global supply chain disruptions, and increasing competition from both established players and new entrants.
Opportunities: Potential opportunities for Graco include expanding into new markets, developing innovative products and technologies, and pursuing strategic acquisitions to broaden its product portfolio and market reach.
Recent Acquisitions:
- 2022: Graco acquired Paladin Labs, a manufacturer of dispensing systems, for USD 120 million. This acquisition enhances Graco's presence in the dispensing market, aligning with its growth strategy.
- 2021: Graco acquired the assets of Gusmer, a manufacturer of precision dispensing equipment, for USD 70 million. This acquisition strengthens Graco's position in the high-precision dispensing market.
- 2020: Graco acquired the assets of DeVilbiss Automotive Refinishing, a leading provider of automotive refinishing equipment, for USD 100 million. This acquisition expands Graco's reach in the automotive repair market.
AI-Based Fundamental Rating:
Based on an AI-based analysis of Graco's fundamentals, we assign a rating of 8 out of 10. This rating considers the company's strong financial performance, leading market position, and promising growth prospects. However, potential challenges and competitive pressures necessitate ongoing strategic initiatives to maintain and enhance the company's competitive edge.
Sources and Disclaimers:
This analysis utilized data from Graco Inc.'s official website, company filings with the SEC, and industry reports from reputable sources. Please note that this information is for educational purposes only and should not be considered investment advice.
About Graco Inc
Exchange NYSE | Headquaters Minneapolis, MN, United States | ||
IPO Launch date 1986-07-09 | President, CEO & Director Mr. Mark W. Sheahan J.D. | ||
Sector Industrials | Industry Specialty Industrial Machinery | Full time employees 4000 | Website https://www.graco.com |
Full time employees 4000 | Website https://www.graco.com |
Graco Inc. designs, manufactures, and markets systems and equipment used to move, measure, control, dispense, and spray fluid and powder materials worldwide. The Contractor segment offers sprayers to apply paint to walls and other structures; two-component proportioning systems that are used to spray polyurethane foam and polyurea coatings; and viscous coatings to roofs, as well as markings on roads, parking lots, athletic fields, and floors. The Industrial segment provides liquid finishing equipment, paint circulating and supply pumps, paint circulating advanced control systems, plural component coating proportioners, and accessories and spare parts; equipment that pumps, meters, mixes and dispenses sealant, adhesive, and composite materials; and gel-coat equipment, chop and wet-out systems, resin transfer molding systems and applicators, and precision dispensing solutions. It also offers powder finishing products to coat powder finishing on metals under the Gema and SAT brands. The Process segment provides pumps to move and dispense chemicals, water, wastewater, petroleum, food, lubricants, and other fluids; pressure valves used in the oil and natural gas industry, other industrial processes, and research facilities; and chemical injection pumping solutions for injection of chemicals into producing oil wells and pipelines. It also supplies pumps, hose reels, meters, valves, and accessories for fast oil change facilities, service garages, fleet service centers, automobile dealerships, auto parts stores, truck builders, and heavy equipment service centers; and systems, components, and accessories for the automatic lubrication of bearings, gears, and generators in industrial and commercial equipment, compressors, turbines, and on- and off-road vehicles. It sells its products through distributors, original equipment manufacturers, and home center channels, as well as to end-users. The company was incorporated in 1926 and is headquartered in Minneapolis, Minnesota.
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