Fact based stock research
Grafton (LSE:GFTU)

IE00B00MZ448

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Grafton stock research in summary

graftonplc.com

ANALYSIS: With an Obermatt Combined Rank of 35 (worse than 65% compared with investment alternatives), Grafton (Trading & Distribution, Ireland) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Grafton are low in value (priced high) with a consolidated Value Rank of 44 (worse than 56% of alternatives) and show below-average growth (Growth Rank of 27) but are safely financed (Safety Rank of 75), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 35, is a hold recommendation based on Grafton's financial characteristics. As the company Grafton's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 44) and low growth (Obermatt Growth Rank of 27), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 75) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	44
Growth Rank	27
Safety Rank	75
Combined Rank	35

Country	Ireland
Industry	Trading & Distribution
Index	FTSE All Shares, FTSE 250, FTSE 350, Sound Pay Europe
Size class	Large

This stock has achievements: Insight 2019-03-08.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Grafton

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	72	22	42	44
GROWTH
GROWTH	93	29	43	27
SAFETY
SAFETY	75	38	62	75
SENTIMENT
SENTIMENT	n/a	59	76	^new
360° VIEW
360° VIEW	n/a	10	57	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Grafton is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	72	22	42	44
GROWTH
GROWTH	93	29	43	27
SAFETY
SAFETY	75	38	62	75
COMBINED
COMBINED	98	1	30	35

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Grafton the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 44 (worse than 56% compared with alternatives), Grafton shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Grafton. Expected dividend yields are higher than for 58% of comparable companies (a Dividend Yield rank of 58), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 58, which means that the stock price is lower compared with invested capital than for 58% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 41 which means that the stock price compared with what market professionals expect for future profits is higher than for 59% of comparable companies, indicating a low value concerning Grafton's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Grafton with a rank of 33. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 67% of comparable companies, indicating a low value concerning Grafton's profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 44, is a hold recommendation based on Grafton's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Grafton may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	49	38	43	41
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	94	36	29	33
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	48	1	61	58
DIVIDEND YIELD
DIVIDEND YIELD	32	61	63	58
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	72	22	42	44

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Grafton; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 27 (better than 27% compared with alternatives), Grafton shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Grafton. Sales Growth has a rank of 80 which means that currently professionals expect the company to grow more than 80% of its competitors. Stock Returns are also above average with a rank of 58. But Capital Growth has only a rank of 13, which means that currently professionals expect the company to grow its invested capital less than 87% of its competitors. Profit Growth is also low, with a rank of only 15, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 27, is a hold recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 58% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	81	45	23	80
PROFIT GROWTH
PROFIT GROWTH	50	45	23	15
CAPITAL GROWTH
CAPITAL GROWTH	n/a	6	73	13
STOCK RETURNS
STOCK RETURNS	80	59	73	58
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	93	29	43	27

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Grafton.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 75 (better than 75% compared with alternatives) for 2024, the company Grafton has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Grafton is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators where two out of three are above average for Grafton.Leverage is at 76, meaning the company has a below-average debt-to-equity ratio. It has less debt than 76% of its competitors.Refinancing is at a rank of 67, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 67% of its competitors. Liquidity is at 49, meaning that the company generates less profit to service its debt than 51% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 75 (better than 75% compared with alternatives), Grafton has a financing structure that is significantly safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. Investors should compare Obermatt’s Value, Growth, and Sentiment Ranks before deciding. They may also want to investigate why cash flows are expected to be low, making debt service for Grafton more challenging. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	56	43	68	76
REFINANCING
REFINANCING	62	77	83	67
LIQUIDITY
LIQUIDITY	82	27	30	49
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	75	38	62	75

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Grafton and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	75	80	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	92	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	13	13	^new
MARKET PULSE
MARKET PULSE	n/a	54	88	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	59	76	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Grafton.
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