Ferguson plc (FERG) is a leading industrial distribution business based in the UK. Ferguson is listed on the London Stock Exchange (LSE) and employs 34,000 staff. All prices are listed in pence sterling.
|52-week range||3649.9444p - 9516p|
|50-day moving average||8927.03p|
|200-day moving average||7903.5747p|
|Wall St. target price||80.03p|
|Dividend yield||2.67p (2.9%)|
|Earnings per share (TTM)||423.5p|
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Valuing Ferguson stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Ferguson's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
Ferguson's current share price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 22x. In other words, Ferguson shares trade at around 22x recent earnings.
That's relatively high compared to, say, the trailing 12-month P/E ratio for the FTSE 250 at the end of September 2019 (19.71). The high P/E ratio could mean that investors are optimistic about the outlook for the shares or simply that they're over-valued.
Ferguson's "price/earnings-to-growth ratio" can be calculated by dividing its P/E ratio by its growth – to give 2.5787. A low ratio can be interpreted as meaning the shares offer better value, while a higher ratio can be interpreted as meaning the shares offer worse value.
The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into Ferguson's future profitability. By accounting for growth, it could also help you if you're comparing the share prices of multiple high-growth companies.
Ferguson's EBITDA (earnings before interest, taxes, depreciation and amortisation) is a whopping £1.8 billion.
The EBITDA is a measure of a Ferguson's overall financial performance and is widely used to measure a its profitability.
|Revenue TTM||£21.8 billion|
|Operating margin TTM||7.11%|
|Gross profit TTM||£6.4 billion|
|Return on assets TTM||7.81%|
|Return on equity TTM||21.88%|
|Market capitalisation||£20.5 billion|
TTM: trailing 12 months
Environmental, social and governance (known as ESG) criteria are a set of three factors used to measure the sustainability and social impact of companies like Ferguson.
When it comes to ESG scores, lower is better, and lower scores are generally associated with lower risk for would-be investors.
Total ESG risk: 72.24
Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and Ferguson's overall score of 72.24 (as at 01/01/2019) is pretty weak – landing it in it in the 83rd percentile of companies rated in the same sector.
ESG scores are increasingly used to estimate the level of risk a company like Ferguson is exposed to within the areas of "environmental" (carbon footprint, resource use etc.), "social" (health and safety, human rights etc.), and "governance" (anti-corruption, tax transparency etc.).
Environmental score: 79.91/100
Ferguson's environmental score of 79.91 puts it squarely in the 100th percentile of companies rated in the same sector. This could suggest that Ferguson is a laggard in its sector in terms of its environmental impact, and exposed to a greater level of risk.
Social score: 61.02/100
Ferguson's social score of 61.02 puts it squarely in the 59th percentile of companies rated in the same sector. This could suggest that Ferguson is pretty average in terms of looking after its workforce and social impact.
Governance score: 83.14/100
Ferguson's governance score puts it squarely in the 100th percentile of companies rated in the same sector. That could suggest that Ferguson is a laggard in its sector in terms of responsible leadership, and exposed to a greater level of risk.
|Total ESG score||72.24|
|Total ESG percentile||82.84|
|Environmental score percentile||100.48|
|Social score percentile||59.42|
|Governance score percentile||100.48|
Dividend payout ratio: 34.51% of net profits
Recently Ferguson has paid out, on average, around 34.51% of net profits as dividends. That has enabled analysts to estimate a "forward annual dividend yield" of 2.9% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), Ferguson shareholders could enjoy a 2.9% return on their shares, in the form of dividend payments. In Ferguson's case, that would currently equate to about 2.67p per share.
While Ferguson's payout ratio might seem fairly standard, it's worth remembering that Ferguson may be investing much of the rest of its net profits in future growth.
The latest dividend was paid out to all shareholders who bought their shares by 12 November 2020 (the "ex-dividend date").
Ferguson's shares were split on a 18:19 basis on 11 June 2018. So if you had owned 19 shares the day before before the split, the next day you'd have owned 18 shares. This wouldn't directly have changed the overall worth of your Ferguson shares – just the quantity. However, indirectly, the new 5.6% higher share price could have impacted the market appetite for Ferguson shares which in turn could have impacted Ferguson's share price.
Over the last 12 months, Ferguson's shares have ranged in value from as little as 3649.9444p up to 9516p. A popular way to gauge a stock's volatility is its "beta".
Beta is a measure of a share's volatility in relation to the market. The market (LSE average) beta is 1, while Ferguson's is 0.9571. This would suggest that Ferguson's shares are less volatile than average (for this exchange).
Ferguson plc distributes plumbing and heating products in the United States, the United Kingdom, Canada, and Central Europe. It offers plumbing and heating solutions to customers in the residential, municipal, civil and industrial markets, and commercial sectors for repair, maintenance, and improvement (RMI), as well as new construction markets. The company also distributes pipes, valves, fittings, hydrants, meters, and related water management products, as well as offers related services, such as water line tapping and pipe fusion services. In addition, it distributes heating, ventilation, air conditioning, refrigeration equipment, and parts and supplies to specialist contractors in the residential and commercial markets for repair and replacement; and PVF products to industrial customers. Further, the company fabricates and supplies fire protection systems and bespoke fabrication services to commercial contractors for new construction and renovation projects, as well as offers products, services, and solutions to enable maintenance of facilities across various RMI markets. Additionally, it offers supply chain management solutions for PVF; and industrial maintenance, repair, and operations specializing in delivering automation, instrumentation, engineered products, and turn-key solutions. The company also sells its home improvement products directly to consumers, as well as through a network of online stores. In addition, it operates its B2B business primarily under the Ferguson brand; and B2C business under the Build.com brand. Further, the company provides products and services for maintenance of multi-family properties, government agencies, hospitality, education, healthcare, and other facilities. It operates a network of 2,194 branches and 19 distribution centers. Ferguson plc was founded in 1887 and is headquartered in Wokingham, the United Kingdom.
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