GracoGGG +1.21%91 Degree of Financial Leverage is 1.73 as of Mar. 2026. GuruFocus rates GGG with a GF Score™ of 91/100 and a GF Value™ of $90.33 (Modestly Undervalued). The stock has 1 warning sign investors should review. Among 2,985 Industrial Products companies, Graco ranks worse than 83.62% on this metric.
Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in Earnings Before Interest and Taxes (EBIT).
Graco's Degree of Financial Leverage for the quarter that ended in Mar. 2026 was 1.73. The higher Degree of Financial Leverage, the more volatile earnings will be.
The industry rank for Graco's Degree of Financial Leverage or its related term are showing as below:
GGG's Degree of Financial Leverage is ranked worse than 83.62% of 2985
companies
in the Industrial Products industry
Industry Median: 1
vs GGG: 1.73
Graco (NYSE:GGG) Degree of Financial Leverage Explanation
Degree of Financial Leverage (DFL) is a leverage ratio that measures the sensitivity of a company’s Earnings per Share (EPS) to fluctuations in its operating income, also referred to as Earnings Before Interest and Taxes (EBIT), resulting from adjustments in its capital structure. DFL is an essential tool for companies to assess the appropriate level of debt or financial leverage in their capital structure. When EBIT remains relatively stable, it results in stable earnings and earnings per share. In such cases, the company may consider taking on substantial debt. However, for companies operating in industries with significant fluctuations in EBIT, it is advisable to keep debt at a manageable level.
The higher Degree of Financial Leverage, the more volatile earnings will be. Because interest is a fixed expense, leverage can amplify earnings and EPS. This is beneficial when EBIT is growing, but it can become problematic in tough economic conditions when EBIT is under pressure.
Be Aware
The use of financial leverage varies across different industries and business sectors, and the application of Degree of Financial Leverage (DFL) should be adjusted accordingly.
Graco Degree of Financial Leverage Related Terms
Graco Degree of Financial Leverage Historical Data
* Premium members only.
The historical data trend for Graco's Degree of Financial Leverage can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
GGG vs RRX, PNR, CR: Degree of Financial Leverage Comparison
For the Specialty Industrial Machinery subindustry, Graco's Degree of Financial Leverage, along with its competitors' market caps and Degree of Financial Leverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Graco Degree of Financial Leverage vs Industrial Products Industry
For the Industrial Products industry and Industrials sector, Graco's Degree of Financial Leverage distribution charts can be found below:
* The bar in red indicates where Graco's Degree of Financial Leverage falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
** TTM data of EPS and EBIT was used to calculate Degree of Financial Leverage.
*** Please be aware that the Degree of Financial Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
What does a Degree of Financial Leverage of 1.73 mean?
Graco (GGG) has a Degree of Financial Leverage of 1.73 as of Mar. 2026. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in EBIT. View historical data for Graco and its competitors. According to the industry distribution chart, Graco ranks #2496 out of 2985 companies in the Industrial Products industry, placing it in the top 83.6%.
Is Graco's Degree of Financial Leverage too high?
Graco's current Degree of Financial Leverage is 1.73. The Industrial Products industry median Degree of Financial Leverage is 1.00. Graco's value of 1.73 is 73% above this industry median. Based on the distribution chart, Graco ranks #2496 out of 2985 companies in the Industrial Products industry, which is in the bottom quartile relative to peers. Overall, Graco has a GF Score™ of 91/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Graco's Degree of Financial Leverage compare to RRX and PNR?
According to the Industrial Products industry distribution chart, Graco ranks #2496 out of 2985 companies for Degree of Financial Leverage. This places Graco in the lower half of its industry. The industry median Degree of Financial Leverage is 1.00. Graco's value of 1.73 is 73% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Degree of Financial Leverage for an Industrial Products company?
The median Degree of Financial Leverage among Industrial Products companies is 1.00, based on 2,985 companies in the industry. Companies in the top quartile (top 25%) have a Degree of Financial Leverage significantly above this median, while those in the bottom quartile fall well below. However, Degree of Financial Leverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Graco's current Degree of Financial Leverage of 1.73 is 73% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Degree of Financial Leverage mean?
A high Degree of Financial Leverage can signal that a stock is expensive relative to its fundamentals. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in EBIT. View historical data for Graco and its competitors. For the Industrial Products industry, the median Degree of Financial Leverage is 1.00 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Graco's current Degree of Financial Leverage is 1.73. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Graco stock overvalued right now?
Based on GuruFocus' analysis, Graco (GGG) is currently considered Modestly Undervalued. The stock's GF Value™ is $90.33, compared to a current price of $75.06 — trading 16.9% below its estimated fair value. The current Degree of Financial Leverage is 1.73 and 73% above the Industrial Products industry median of 1.00. Graco's overall GF Score™ is 91/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Degree of Financial Leverage calculated?
Degree of Financial Leverage is calculated from a company's financial statements. For Graco (GGG), the current Degree of Financial Leverage is 1.73 as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Graco (GGG) Overvalued in 2026?
Based on GuruFocus' analysis, Graco stock appears to be undervalued.
The current stock price of $75.06 is trading 16.9% below its estimated GF Value™ of $90.33.
GuruFocus considers Graco to be Modestly Undervalued.
Key valuation signals for GGG:
Degree of Financial Leverage: 1.73
GF Value™: $90.33 vs. price of $75.06 (16.9% below fair value)
Industry Position: 73% above the Industrial Products median (#2496 of 2985)
No single metric tells the full story. See the GGG stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Graco manufactures equipment used for managing fluids, coatings, and adhesives, specializing in difficult-to-handle materials. Graco's business is organized into three segments: industrial, process, and contractor. The Minnesota-based firm serves a wide range of end markets, including industrial, automotive, and construction, and its broad array of products include pumps, valves, meters, sprayers, and equipment used to apply coatings, sealants, and adhesives. The firm generated roughly $2.2 billion in sales in 2025.
91GF Score
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