W. W. Grainger: Overvalued

February 4, 2012

By Difu Wu:

Company Description (from recent 10-K)

W.W. Grainger, Inc. (GWW) is a is a broad-line distributor of maintenance, repair and operating supplies and other related products and services used by businesses and institutions primarily in the United States and Canada, with an expanding presence in Asia and Latin America.

W.W. Grainger is a dividend aristocrat, having raised its dividend for 40 consecutive years.

A 10-year summary of Sales, Earnings Before Interest and Tax (EBIT), Earnings per share (EPS), yearly high and low stock price, corresponding high and low P/E (calculated by dividing the high and low price by the EPS for the year), and average P/E (average of high and low P/E) is shown below. Prices are adjusted for stock splits.

Key 10-year data for W.W. Grainger

Year

Sales (in Millions)

EBIT (in Millions)

EPS

High Price

Low Price

High P/E

Low P/E

Average P/E

2011

8080

1050

9.07

190

130

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