W.W. Grainger Inc.
is the leading provider of maintenance, repair, supplies and service for
safety, lab, automotive and industrial products to businesses and institutions
to keep their facilities and equipment running.
The company has grown profits and dividends at a 13-14% rate over the
past 10 years earning a 12-20% return on equity. While GWW
was impacted by the slowdown in the economy, it made a strong come back in 2010
and should continue to record profit growth for the long term by:
(1) expanded
product offerings. The company added
234,000 since 2006. It is also rapidly
growing its private label products,
(2) rapid
penetration of the e-commerce market which is the fastest growing segment of
its business,
(3) acquisitions,
(4) strong cash
flow which sustains a continuing stock buyback program.
Negatives:
(1) slow global
economic growth,
(2) currency
fluctuations.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2004
Ind Ave 2.0 8 31 NA
Debt/ EPS Down Net Value Line
Equity ROE Since 2004 Margin Rating
Ind Ave 25 15 NA 10 NA
Chart
Note: GWW stock made great progress off its March
2009 low, quickly surpassing the downtrend off its August 2008 high (straight
red line) and the November 2008 high (green line). Long term, the stock is in an uptrend (blue
lines). Intermediate term it is a
trading range (purple lines). The wiggly
red line is the 50 day moving average. The Dividend Growth Portfolio owns a 50%
position in GWW by virtue of having Sold Half in mid-2012. The upper boundary of its Buy Value Range is
$88; the lower boundary of its Sell Half Range is $216.
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