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Graco (GGG) Owner Earnings per Share (TTM) : 2.62 (As of Dec. 2023)


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What is Graco Owner Earnings per Share (TTM)?

In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

Graco's Owner Earnings per Share (TTM) ended in Dec. 2023 was $2.62. It's Price-to-Owner-Earnings ratio for today is 34.1.


The historical rank and industry rank for Graco's Owner Earnings per Share (TTM) or its related term are showing as below:

GGG' s Price-to-Owner-Earnings Range Over the Past 10 Years
Min: 10.65   Med: 28.36   Max: 143.47
Current: 34.05


During the past 13 years, the highest Price-to-Owner-Earnings ratio of Graco was 143.47. The lowest was 10.65. And the median was 28.36.


GGG's Price-to-Owner-Earnings is ranked worse than
64.09% of 1370 companies
in the Industrial Products industry
Industry Median: 23.235 vs GGG: 34.05

Graco's Earnings per Share (Diluted) for the three months ended in Dec. 2023 was $0.64. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Dec. 2023 was $2.94. It's PE Ratio ratio for today is 30.39.

Graco's EPS without NRI for the three months ended in Dec. 2023 was $0.80. Its EPS without NRI for the trailing twelve months (TTM) ended in Dec. 2023 was $3.05. It's PE Ratio without NRI ratio for today is 29.30.


Graco Owner Earnings per Share (TTM) Historical Data

The historical data trend for Graco's Owner Earnings per Share (TTM) 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.

* Premium members only.

Graco Owner Earnings per Share (TTM) Chart

Graco Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Owner Earnings per Share (TTM)
Get a 7-Day Free Trial Premium Member Only Premium Member Only 1.97 1.58 1.97 1.45 2.62

Graco Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Owner Earnings per Share (TTM) Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.45 1.74 2.20 2.56 2.62

Competitive Comparison of Graco's Owner Earnings per Share (TTM)

For the Specialty Industrial Machinery subindustry, Graco's Price-to-Owner-Earnings, along with its competitors' market caps and Price-to-Owner-Earnings 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's Price-to-Owner-Earnings Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, Graco's Price-to-Owner-Earnings distribution charts can be found below:

* The bar in red indicates where Graco's Price-to-Owner-Earnings falls into.



Graco Owner Earnings per Share (TTM) Calculation

In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

To make it simple, then you will have:

Owner Earnings per Share (TTM) = (Net Income + Depreciation, Depletion and Amortization + Change In Deferred Tax - 5Y Average of Maintenance Capital Expenditure + Change In Working Capital) / Shares Outstanding (Diluted Average)

Graco's Owner Earnings per Share (TTM) Calculation:

TTM / Last Quarter Average of Last 20 Quarters
Net Income 507
Depreciation, Depletion and Amortization 74
Change In Deferred Tax -9
5Y Average of Maintenance Capital Expenditure 129
Change In Working Capital 7
Shares Outstanding (Diluted Average) 172

1. Start with "Net Income" from income statement. Graco's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was $507 Mil.

2. "Depreciation, Depletion and Amortization" is from cashflow statement. Graco's Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Dec. 2023 was $74 Mil. This needs to be added back because company does not actually need to pay cash for it. It is a non-cash item.

3. Other non-cash charges usually include "Stock Based Compensation" and "Change In Deferred Tax":
However, to be conservative, GuruFocus will not add Stock Based Compensation back to net income. Graco's Change In Deferred Tax for the trailing twelve months (TTM) ended in Dec. 2023 was $-9 Mil.

4. Average maintenance capital expenditure over a business/industry cycle: 5-Year Average Maintenance Capital Expenditure = $129 Mil

It is usually best to take a long-term average of maintenance capital expenditure. Ideally this would be as long as 10 years and include at least one economic downturn. However, since many companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year maintenance capital expenditure.

The following shows how to get maintenance capital expenditure.

First, calculate the revenue change regarding to the previous quarter. If the revenue decreased from the previous quarter, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous quarter, then calculate the percentage of Net PPE as of corresponding Revenue.
Growth Capital Expenditure = Percentage of Property, Plant and Equipment as of corresponding Revenue * Revenue Increase
Third, calculate Capital Expenditure (positive) - Growth Capital Expenditure.
If [Capital Expenditure (positive) - Growth Capital Expenditure] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - Growth Capital Expenditure] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - Growth Capital Expenditure.
Fourth, get the average of the 5 years maintenance capital expenditure.

Graco's 5-Year Average Maintenance Capital Expenditure = $129 Mil

5. "Change In Working Capital" is from cashflow statement. Graco's Change In Working Capital for the trailing twelve months (TTM) ended in Dec. 2023 was $7 Mil.
Note: GuruFocus' Change in Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And sometimes it includes non-current parts of assets and liabilities.

6. Graco's Shares Outstanding (Diluted Average) for the months ended in Dec. 2023 was 171.788 Mil.

Graco's Onwer Earnings Per Share for Dec. 2023 is calculated as:

Owner Earnings per Share (TTM)
=( Net Income+Depreciation, Depletion and Amortization+Change In Deferred Tax
=( 506.511 +74.321+-8.502
-5Y Avg of Maintenance CAPEX+Change In Working Capital )/Shares Outstanding (Diluted Average)
-128.66516047674+7.129)/171.788
=2.62

Price-to-Owner-Earnings=Current Price/Owner Earnings per Share (TTM)
=89.35/2.62
=34.1

* 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.


Be Aware

Assumption: Companies usually do not report maintenance capital expenditures and growth capital expenditures separately. Here we use estimated numbers and average them over 5 years. The method to estimate maintenance capital expenditures can be found in above part 4.

Note: GuruFocus' Change In Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And it includes non-current parts of assets and liabilities.


Graco Owner Earnings per Share (TTM) Related Terms

Thank you for viewing the detailed overview of Graco's Owner Earnings per Share (TTM) provided by GuruFocus.com. Please click on the following links to see related term pages.


Graco (GGG) Business Description

Industry
Traded in Other Exchanges
Address
88-11th Avenue Northeast, Minneapolis, MN, USA, 55413
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 $2.1 billion in sales and $573 million in operating income in 2022.
Executives
Mark W Sheahan officer: VICE PRESIDENT AND TREASURER P.O. BOX 1441, MINNEAPOLIS MN 55440-1441
Angela F Wordell officer: Executive VP, Operations 88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Kathryn L Schoenrock officer: Executive Vice President 88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Caroline M Chambers officer: Vice President and Controller PO BOX 1441, MINNEAPOLIS MN 55440-1441
Eric Etchart director ROOM F, 22F CROSS REGION PLAZA, 899 LINGLING ROAD, SHANGHAI F4 200030
Van Sant R William director PO BOX 1441, MINNEAPOLIS MN 55440-1441
Timothy R White officer: President, EMEA 88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Ronita Banerjee officer: EVP, Chief HR Officer 88 11TH AVENUE NE, MINNEAPOLIS MN 55105
Jeffrey P. Johnson officer: Vice President 88 - 11TH AVENUE N.E., MINNEAPOLIS MN 55413
Heather L Anfang director 88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Dale D Johnson officer: VICE PRESIDENT P.O. BOX 1441, MINNEAPOLIS MN 5440-1441
Christopher D. Knutson officer: EVP, Corporate Controller 88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Claudio Merengo officer: President, Worldwide Gema 88 11TH AVENUE NE, MINNEAPOLIS MN 55413
J Kevin Gilligan director P O BOX 1441, MINNEAPOLIS MN 55440-1441
Archie C. Black director 333 SOUTH SEVENTH STREET, SUITE 1000, MINNEAPOLIS MN 55402