Here's Why You Should Add Grainger (GWW) To Your Portfolio
Zacks Investment Research | Dec 25, 2018 11:59PM ET
W.W. Grainger, Inc. (NYSE:GWW) continues to benefit from a turnaround in the Canadian business, investments in digital capabilities and focus on strengthening its customer base. Further, the company’s long-term earnings growth rate of 12.4% makes us confident of its inherent strength.
Let’s delve deeper into the factors that make this stock an attractive investment option.
Upbeat 2018 Guidance
Grainger reaffirmed its 2018 earnings per share guidance of $15.05-$16.05, which reflects year-over-year growth of 36% at the mid-point. The company expects to report earnings at the higher end of the guidance. Earnings will benefit from the lower tax rate. As a result of the U.S. tax reform and the tax benefit from stock-based compensation, Grainger expects an adjusted tax rate of 23-26% for the year.
Other Driving Factors
In its Canada business, the execution of Grainger’s turnaround continues to make progress. The company is focused on improving gross margin and reducing its cost structure in the Canada operations. It expects to record a profitable run rate in 2018 for the business.
Notably, Grainger will continue its efforts to strengthen relationships with both large- and mid-sized customers. The company has been witnessing increasing volumes across all customer groups, lately. Grainger also continues to re-engage lapsed customers and acquire new ones.
Of late, Grainger’s e-commerce sales have gained primarily backed by the launch of Grainger.com and other electronic purchasing platforms in the United States. Grainger is focused on improving end-to-end customer experience by making investments in its e-commerce and digital capabilities, and executing continued improvement initiatives within the company’s supply chain.
Solid Zacks Rank, Score Combination
Grainger carries a Zacks Rank #2 (Buy), at present. It has a Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.