Recent Buy

ID-100426334-300x300 Recent BuyI added a new position to my portfolio W W Grainger Inc (GWW).

6 Shares @ $176.30 on 6-15-2017

This will increase my forward 12-months dividend income by $30.72 to a total of $3,764.02

I updated my Portfolio Page to reflect the change.

As I discussed in my Stock Consideration post a few week ago, I find GWW to be a great buy at these level.

Here are some numbers to prove why I think it is a great buy right now.

Current PE: 17.86     5-year average PE: 21.5

Forward PE: 16.6

2016 EPS: $9.87

2017 Estimate EPS: $10.65

2018 Estimate EPS: $13.15

Dividend Payout: 49.6%

Dividend Yield: 2.93%    5-year average: 1.76%

 As you see above, the current PE level is much lower than the 5-year average. Even the forward PE level is lower than the current. Also, looking at the current dividend yield which is over 100 points higher compared to the 5-year average. Theses two matrices show that GWW is undervalued.

With the payout being at a respectable level, it means that there is plenty of money for sustainable high single digit dividend growth rate.

Here we have different Fair Value estimates.

S&P Capital IQ Fair Value: $173.30

Yahoo Price Target: $187.45

My DDM Analysis: $187.64

As you see above, GWW is very much undervalued right now.

Thanks for reading, and don’t forget to follow me:

feedly-follow-rectangle-flat-small_2x Recent Buy      

Do you like GWW at these prices? What have you been buying?

Image by Sira Anamwong at FreeDigitalPhotos.net

Comments

  1. Hi Felix, thanks for sharing your buy! I get your remark “high single digit dividend growth rate” based on the numbers, but the average DGR is 1.76% in the past 5 years. How do you reckon GWW will start increasing the growth?

  2. This is an amazing additiona. You forgot to mention the fact that GWW has been paying out increased dividends for over 40 years. This is definitely a company on my watch list also.

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