Fact based stock research
Grainger (LSE:GRI)

GB00B04V1276

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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.

Grainger stock research in summary

graingerplc.co.uk

ANALYSIS: With an Obermatt Combined Rank of 61 (better than 61% compared with investment alternatives), Grainger (Real Estate: Operating Services, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of Grainger are low in value (priced high) with a consolidated Value Rank of 32 (worse than 68% of alternatives). But they show above-average growth (Growth Rank of 60) and are safely financed (Safety Rank of 58, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 61, is a buy recommendation based on Grainger's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Grainger exhibits low value (Obermatt Value Rank of 32), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 60). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 58) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). 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	32
Growth Rank	60
Safety Rank	58
Combined Rank	61

Country	United Kingdom
Industry	Real Estate: Operating Services
Index	FTSE All Shares, FTSE 250, FTSE 350, R/E Europe
Size class	Small

19-Dec-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: Grainger

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	39	18	16	32
GROWTH
GROWTH	59	71	81	60
SAFETY
SAFETY	59	73	79	58
SENTIMENT
SENTIMENT	n/a	89	96	^new
360° VIEW
360° VIEW	n/a	81	92	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Grainger is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	39	18	16	32
GROWTH
GROWTH	59	71	81	60
SAFETY
SAFETY	59	73	79	58
COMBINED
COMBINED	50	62	74	61

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Grainger the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 32 (worse than 68% compared with alternatives), Grainger shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Grainger. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 78% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 11 which means that the stock price compared with what market professionals expect for future profits is higher than 89% of comparable companies, indicating a low value concerning Grainger's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 32 which means that the stock price compared with what market professionals expect for future profit levels is higher than 68% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 43 is also low. Compared with invested capital, the stock price is higher than for 57% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 32, is a hold recommendation based on Grainger's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Grainger? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Grainger only if they reasonably expect the low current profit levels to be transitory. 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)	28	7	5	11
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	44	22	22	32
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	34	52	38	43
DIVIDEND YIELD
DIVIDEND YIELD	44	28	56	78
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	39	18	16	32

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Grainger; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 60 (better than 60% compared with alternatives), Grainger shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Grainger. Sales Growth has a rank of 84 which means that currently, professionals expect the company to grow more than 84% of its competitors. Capital Growth is also above 44% of competitors with a rank of 64. But Profit Growth only has a rank of 44, which means that currently professionals expect the company to grow its profits less than 56% of its competitors. And Stock Returns have also been below average with a rank of only 27. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 60, is a buy recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. 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	56	72	80	84
PROFIT GROWTH
PROFIT GROWTH	10	80	24	44
CAPITAL GROWTH
CAPITAL GROWTH	n/a	43	100	64
STOCK RETURNS
STOCK RETURNS	64	35	63	27
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	59	71	81	60

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Grainger.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 58 (better than 58% compared with alternatives), the company Grainger has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Grainger 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 Grainger.Leverage is at 63, meaning the company has a below-average debt-to-equity ratio. It has less debt than 63% of its competitors.Refinancing is at a rank of 88, 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 88% of its competitors. Liquidity is at 18, meaning that the company generates less profit to service its debt than 82% 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 58 (better than 58% compared with alternatives), Grainger has a financing structure that is 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 Grainger more challenging. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	48	60	64	63
REFINANCING
REFINANCING	52	91	85	88
LIQUIDITY
LIQUIDITY	49	34	52	18
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	59	73	79	58

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Grainger 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	76	80	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	13	83	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	96	57	^new
MARKET PULSE
MARKET PULSE	n/a	73	81	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	89	96	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Grainger.
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