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W.W. Grainger

GWW
51
Industrial - Distribution · Industrials
Price
$1395.01
-7.02 (-0.50%)
Market Cap
$65.86B
Winston Score
51
Winston is curious
Mixed quality — meaningful strengths and weaknesses.

Share count falling — buybacks

8.0% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 52.2M (2021) → 48.0M (2025)

W.W. Grainger sells maintenance, repair, and operations (MRO) supplies to businesses. Think of it as a giant hardware and industrial supply store for companies — selling things like safety equipment, tools, motors, lighting, and cleaning products. Its main customers are factories, hospitals, schools, contractors, and government agencies across North America.

Grainger makes money by selling products directly to business customers, either through its website, catalogs, or sales representatives. It operates primarily in the United States and Canada, with a growing online business in Japan through its subsidiary MonotaRO. With over one million products available and deep relationships with large institutional buyers, Grainger benefits from the sheer convenience and reliability it offers customers who need supplies fast. The key growth driver is continued expansion of its digital sales channels and its "endless assortment" model, which targets smaller businesses through its Zoro brand — though competition from Amazon Business remains a real and growing threat.

Winston Score History

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+4.5% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

-3.0% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

8.5%ownership

Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$585M cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

W.W. Grainger is growing revenue at 5% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin
39.5%
Modest — 39.5% gross margin
Operating Margin
14.3%
Healthy — 14.3% operating margin
ROCE
9.1%
Below par — 9.1% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY
+4.5%
Slow sales growth (4.5% YoY)
EPS YoY
-9.1%
Earnings shrinking (-9.1% YoY)

Slight earnings drop. Typical near a cyclical low.

EPS Consistency
4/8 quarters
Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion
118%
Turns 118% of profit into real cash
FCF Margin
7.4%
Modest free cash flow (7.4%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity
0.69
Moderate — manageable debt (0.69)
Interest Cover
30.80x
Comfortably covers interest (30.8x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)
39.3x
Pricey — P/E 39.3

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward
+12.3
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (39.3 → 27.0)

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Dividends

Dividend Yield
0.68%
Small dividend — 0.68% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend Growth
+10.2%
Dividend growing fast (10.2% YoY)

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