Could Grainger Stock Keep Growing in 2021?

The industrial stock could be a steady grower for long term investors

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W.W. Grainger, Inc. (NYSE:GWW) is one of the biggest suppliers of maintenance, repair, and operating products in North America. The company now serves more than 3.5 million customers worldwide, with operations also in Europe, Asia, and Latin America. W.W. Grainger provides consumers access to a consistent supply of motors, lighting, material handling, plumbing, tools, and safety supplies, along with inventory management services and technical support.

W.W. Grainger stock has increased 60% in price compared to what it traded at a year ago, with support from the 20-day moving average helping to guide shares higher during the past month. However, GWW as also been consolidating just below the $400 mark, which has kept the security at a modest  3% year-to-date deficit. Additionally, Grainger stock offers a forward dividend of $6.12 and a dividend yield of 1.55%. Records of the company’s first dividend payment date back 1989. 

From a fundamental point of view, GWW is displaying signs of a good value stock. Although it doesn’t offer the highest yield, Grainger stock dividend comes with a sense of security a lot of other newer stocks lack. Moreover, GWW has a price-earnings ratio of 30.93, which is undoubtedly high. However, that figure is expected to drop down significantly, as estimates place the stock’s forward price-earnings at 21.69.

In addition, Grainger has maintained steady revenue growth for several years, including this past year. In fiscal 2020, Grainger increased revenues by nearly $300 million, or 2.7%, bringing its total up to almost $11.8 billion. On the bottom line Grainger has maintained a similar growth rate. However, the firm wasn’t able to prevent its net income from falling in fiscal 2020. Grainger net profits fell about $150 million or 18%, bringing its total net income down to $695 million. Overall, Grainger stock should be a steady grower for long-term investors.

 

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