W.W. Grainger has paid dividends in the past. The company has a 51-year record of increased dividends. You might wonder if this Fortune 500 industrial supply company should be on your list for good dividends. Is it a hereditary trait?
It deserves a place among the Dividend Kings and Dividend Aristocrats, which are companies that have raised their dividends over 50 and 25 years.
We will look at factors you need to know about W.W. Grainger Inc. By the time you're done reading, you'll have a better idea of what the company is all about.
You can learn more about what are dividend stocks. There are dividend stocks examples.
By 1937, William W. Grainger's company had 16 branches and sales of more than $1 million, after he borrowed $6,000 from his wife to start it. The company was public in 1967. In 1996 it established itself in Mexico and Canada.
MRO products and services are distributed by W.W. Grainger Inc. Maintenance, repair and operating are referred to as MRO. Many businesses, corporations, governments and other types of entities are served by the company.
Safety and security supplies
Material handling and storage equipment
Pumps and plumbing equipment
Cleaning and maintenance supplies
Metalworking and hand tools
During its September 21 investment day, W.W. Grainger said it expected years of growth. The US market's outgrowth target has been increased to 500 basis points per year. The company has high expectations for Zoro and MonotaRO. The company will benefit from its back-to-basics approach and differentiated sales and services throughout the years.
Pros and Cons of W.W. Grainger Inc.
What are the benefits and drawbacks of investing in W.W. Before investing, let's look at it.
There are benefits to investing in W.W. Grainger Inc.
Dividends: A Dividend Aristocrat, W.W. Grainger Inc. has a dividend yield of 1.30%, annual dividend of $6.88 and a dividend payout ratio of 27.14% (which signifies sufficient earnings to cover its dividend payment in the future), according to MarketBeat dividend data. As of Q2, the company returned $219 million to shareholders through dividends and share repurchases. The company has increased its dividend
Second quarter highlights: The company had sales of $3.8 billion, up 19.6% compared to last year at the same time. The company generated operating earnings of $534 million, up 60% with an EPS of $7.19, a 68.4% increase compared to last year at this same time. The company also increased its full-year guidance and had daily sales growth of 14.5% and 16.5% which also drove the EPS range of $27.25 to $28.75.
ESG initiatives: W.W. Grainger has achieved certain ESG initiatives, which means that a wide variety of constituents can take advantage, including investors. Distribution centers achieved a 92% recycling rate and its facilities in North America have considerable LEED certified space. The company has also committed to absolute scope 1 and 2 emissions by 30% by 2030.
Market growth: In certain segments, such as the High Touch Solutions North America (N.A) segment, W.W. Grainger has achieved tremendous growth evident through its double-digit revenue expansion. The Endless Assortment segment also reported Zoro’s business growth in the high teens. The High-Touch Solutions market should grow between 15.4% and 15.8% compared to overall MRO market growth of 4% to 7%.
Why don't you steer clear of W.W. There are a couple of reasons.
Stock price: Shares have skyrocketed over the summer and the stock has earned a "hold" rating, MarketBeat Ratings reports. Research analysts have issued various ratings for the stock, including "sell," "hold" and "buy" ratings. The stock isn't cheap, and if budget-conscious investors want to invest, they may have to buy fractional shares. At $517.10, you might find yourself in a tight spot.
Downgraded: As of August 1, the Royal Bank of Canada increased their price target on W.W. Grainger from $399 to $422 and indicated an “underperform” rating. As of the same day, Morgan Stanley increased its price target on W.W. Grainger ($421 to $448) and gave the stock an “underweight” rating. StockNews.com also gave it a slight browbeating by switching it from a "strong buy" to a “buy” rating as of June 16.
W.W. Grainger: Is it a Solid Dividend Stock?
Some companies with little cash and equivalents may use stock dividends to reward shareholders, but keep in mind that that reason alone could be the reason you don't want to invest in a company from the start. W.W. Grainger doesn't need to be concerned about that. If you can stomach the stock price, W.W. Grainger can be added to your portfolio.
W.W. Grainger return part of their earnings to investors in the form of dividends. If you never sell, it's better than never making additional money off of your investment.