Graco: A Premium Business, Awarded A More Than Premium Valuation

The Value InvestorInvesting Group LeaderFollow5ShareSavePlay(8min)CommentsSummaryGraco maintains solid fundamentals and a strong balance sheet, but current valuations at 27–30x earnings are demanding.Recent M&A, including the $69M Radia deal and Corob S.p.A. acquisition, add 4% to pro forma sales growth, but organic growth guidance remains low single digits.Capital allocation includes a 15 million share buyback authorization and a 7% dividend hike, reflecting ongoing shareholder returns.Despite tripling over a decade, GGG's premium multiple outpaces its 5% average annual EPS growth; real appeal emerges only in the low $70s.Looking for more investing ideas like this one? Get them exclusively at Value In Corporate Events. Learn More » pixelfit/E+ via Getty Images Shares of Graco (GGG) have been trading quite flat since I last covered shares early in October. Meanwhile, quite some corporate developments have taken place, warranting an update here. While Graco moves materials that matter, itsThis article was written byThe Value Investor27.74K FollowersFollowThe Value Investor has a Master of Science with specialization in financial markets and a decade of experience tracking companies via catalytic company events. As the leader of the investing group Value In Corporate Events they provide members with opportunities to capitalize on IPOs, mergers & acquisitions, earnings reports and changes in corporate capital allocation. Coverage includes 10 major events a month with an eye towards finding the best opportunities. Learn more.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.