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GWW, W.W. Grainger Inc.

Trading Companies & Distributors capital-intensive

Grainger exited the U.K. market by completing the sale of the Cromwell business and closing the Zoro U.K. business.

The Grainger Edge Grainger's strategic framework, the Grainger Edge , uniquely defines the Company by asserting why it exists, how it serves customers and how team members work together to achieve its objectives.

Grainger's purpose is We Keep The World Working , which in turn allows customers to focus on the core of their businesses and do what they do best.

Latest annual: FY2025 10-K

GWW · W.W. Grainger Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$17.9B

+4.5% YoY · 9% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $18.4B 5-yr avg $16.0B

Gross margin 39% 5-yr avg 39%

Operating margin 14.2% 5-yr avg 14.3%

ROIC 34% 5-yr avg 36%

Owner-earnings margin 10% 5-yr avg 9%

Free cash flow margin 8% 5-yr avg 8%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What moves the needle: Gross margin has run about 39% and operating margin about 12% through the cycle, a solid spread between what it charges and what the product costs to make. Inventory runs near 14% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has run high across the record (median 29%, above 15% in 9 of 9 years). Owner earnings agree: roughly 8% of revenue reaches owners as cash, consistently. Whether these returns reflect real pricing power or an accounting artifact is the judgment the 10-K is for.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

20% of revenue comes from outside the United States.

Revenue by geography, FY2025

United States80%$14.4B
Japan12%$2.2B
Canada4%$683M
Other foreign countries4%$645M

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2017–2025

realized figures from each filing · older years to the left

2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
										Income statement
$10.4B	$11.2B	$11.5B	$11.8B	$13.0B	$15.2B	$16.5B	$17.2B	$17.9B	$18.4B	RevenueRevenue
39%	39%	38%	36%	36%	38%	39%	39%	39%	39%	Gross marginGross mgn
29%	28%	27%	27%	24%	24%	24%	24%	25%	25%	SG&A / revenueSG&A/rev
$1.0B	$1.2B	$1.3B	$1.0B	$1.5B	$2.2B	$2.6B	$2.6B	$2.5B	$2.6B	Operating incomeOp. inc.
9.9%	10.3%	11.0%	8.6%	11.9%	14.5%	15.6%	15.4%	13.9%	14.2%	Operating marginOp. mgn
$586M	$782M	$849M	$695M	$1.0B	$1.5B	$1.8B	$1.9B	$1.7B	$1.8B	Net incomeNet inc.
35%	25%	27%	22%	26%	26%	25%	24%	27%	27%	Effective tax rateTax rate
										Cash flow & returns
$1.1B	$1.1B	$1.0B	$1.1B	$937M	$1.3B	$2.0B	$2.1B	$2.0B	$2.1B	Operating cash flowOp. cash
$241M	$257M	$210M	$169M	$173M	$206M	$277M	$311M	$330M	$331M	DepreciationDeprec.
$197M	($29M)	($57M)	$213M	($321M)	($468M)	($137M)	($171M)	($85M)	($71M)	Working capital & otherWC & other
$237M	$239M	$221M	$197M	$255M	$256M	$445M	$541M	$684M	$729M	CapexCapex
2.3%	2.1%	1.9%	1.7%	2.0%	1.7%	2.7%	3.2%	3.8%	4.0%	Capex / revenueCapex/rev
$820M	$818M	$821M	$926M	$764M	$1.1B	$1.8B	$1.8B	$1.7B	$1.8B	Owner earningsOwner earn.
7.9%	7.3%	7.1%	7.8%	5.9%	7.1%	10.6%	10.5%	9.4%	9.7%	Owner earnings marginOE mgn
$820M	$818M	$821M	$926M	$682M	$1.1B	$1.6B	$1.6B	$1.3B	$1.4B	Free cash flowFCF
7.9%	7.3%	7.1%	7.8%	5.2%	7.1%	9.6%	9.1%	7.4%	7.5%	Free cash flow marginFCF mgn
$304M	$316M	$328M	$338M	$357M	$370M	$392M	$421M	$467M	$460M	Dividends paidDiv. paid
$605M	$425M	$700M	$601M	$695M	$603M	$850M	$1.2B	$1.0B	—	BuybacksBuybacks
18%	24%	25%	22%	29%	37%	41%	39%	32%	34%	ROICROIC
35%	41%	46%	38%	56%	63%	59%	57%	46%	45%	Return on equityROE
17%	24%	28%	20%	37%	48%	46%	44%	33%	34%	Retained to equityRetained/eq
										Balance sheet
$327M	$538M	$360M	$585M	$241M	$325M	$660M	$1.0B	$585M	$695M	Cash & investmentsCash+inv
$1.3B	$1.4B	$1.4B	$1.5B	$1.8B	$2.1B	$2.2B	$2.2B	$2.3B	$2.6B	ReceivablesReceiv.
$1.4B	$1.5B	$1.7B	$1.7B	$1.9B	$2.3B	$2.3B	$2.3B	$2.4B	$2.4B	InventoryInvent.
$2.8B	$2.9B	$3.1B	$3.2B	$3.6B	$4.4B	$4.5B	$4.5B	$4.7B	$5.0B	Operating working capitalOper. WC
$3.2B	$3.6B	$3.6B	$3.9B	$4.0B	$5.0B	$5.3B	$5.7B	$5.5B	$5.9B	Current assetsCur. assets
$1.5B	$1.5B	$1.7B	$1.4B	$1.5B	$2.0B	$1.8B	$2.3B	$1.9B	$2.2B	Current liabilitiesCur. liab.
2.1×	2.4×	2.1×	2.7×	2.6×	2.5×	2.9×	2.5×	2.8×	2.7×	Current ratioCurr. ratio
$544M	$424M	$429M	$391M	$384M	$371M	$370M	$355M	$360M	$358M	GoodwillGoodwill
$5.8B	$5.9B	$6.0B	$6.3B	$6.6B	$7.6B	$8.1B	$8.8B	$9.0B	$9.5B	Total assetsAssets
$2.3B	$2.2B	$2.2B	$2.4B	$2.4B	$2.3B	$2.3B	$2.8B	$2.5B	$2.4B	Total debtDebt
$2.0B	$1.6B	$1.8B	$1.8B	$2.1B	$2.0B	$1.6B	$1.7B	$1.9B	$1.7B	Net debt / (cash)Net debt
11.6×	13.2×	—	—	—	—	27.6×	34.2×	30.8×	32.3×	Interest coverageInt. cov.
$1.7B	$1.9B	$1.9B	$1.8B	$1.9B	$2.4B	$3.1B	$3.4B	$3.7B	$3.9B	Shareholders’ equityEquity
0.3%	0.4%	0.3%	0.4%	0.3%	0.3%	0.4%	0.4%	0.4%	0.4%	Stock comp / revenueSBC/rev
$7M	$105M	$123M	$58M	—	—	—	—	—	—	Goodwill written downGW imp.
										Per share
58.0M	56.5M	54.9M	53.7M	52.2M	51.1M	50.1M	49.0M	48.0M	47.4M	Shares out (diluted)Shares
$179.74	$198.60	$209.22	$219.68	$249.46	$298.00	$328.90	$350.37	$373.79	$387.72	Revenue / shareRev/sh
$10.10	$13.84	$15.46	$12.94	$19.98	$30.27	$36.51	$38.96	$35.54	$37.59	EPS (diluted)EPS
$14.14	$14.48	$14.95	$17.24	$14.64	$21.08	$35.01	$36.73	$35.10	$37.49	Owner earnings / shareOE/sh
$14.14	$14.48	$14.95	$17.24	$13.07	$21.08	$31.66	$32.04	$27.73	$29.09	Free cash flow / shareFCF/sh
$5.24	$5.59	$5.97	$6.29	$6.84	$7.24	$7.82	$8.59	$9.73	$9.70	Dividends / shareDiv/sh
$4.09	$4.23	$4.03	$3.67	$4.89	$5.01	$8.88	$11.04	$14.25	$15.38	Cap. spending / shareCapex/sh
$29.14	$34.00	$33.79	$34.04	$35.90	$47.75	$62.18	$68.53	$77.83	$82.91	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	8-yr	5-yr
Revenue / share	+9.6%/yr	+11.2%/yr
Owner earnings / share	+12.0%/yr	+15.3%/yr
EPS	+17.0%/yr	+22.4%/yr
Dividends / share	+8.0%/yr	+9.1%/yr
Capital spending / share	+16.9%/yr	+31.2%/yr
Book value / share	+13.1%/yr	+18.0%/yr

The record, charted

FY2017–2025

Each measure over its full record; the current point and the worst year marked.

Share count

48Mpeak FY2017

ROIC

32%low FY2017

Gross margin

39%low FY2020

Net debt ÷ owner earnings

1.1×peak FY2021

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$1.7Bowner earningsvs.$1.7Bnet incomelow FY2021

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2017FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business earned $1.7B of owner earnings, the operating cash left after the $330M it takes just to hold its position. It put $354M more into growth; free cash flow, after that spending, was $1.3B.

Reported net income$1.7B

Owner earnings$1.7B · 9% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$1.7B	$1.9B	$1.8B	$1.5B	$1.0B
Depreciation & amortizationnon-cash charge added back	+$330M	+$311M	+$277M	+$206M	+$173M
Stock-based compensationreal costnon-cash, but a real cost	+$64M	+$62M	+$62M	+$48M	+$42M
Working capital & othertiming of cash in and out, other non-cash items	−$85M	−$171M	−$137M	−$468M	−$321M
Cash from operations	$2.0B	$2.1B	$2.0B	$1.3B	$937M
Maintenance capital expenditurethe spending needed just to hold position and volume	−$330M	−$311M	−$277M	−$256M	−$173M
Owner earnings	$1.7B	$1.8B	$1.8B	$1.1B	$764M
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	−$354M	−$230M	−$168M	—	−$82M
Free cash flow	$1.3B	$1.6B	$1.6B	$1.1B	$682M
Owner-earnings marginowner earnings ÷ revenue	9%	10%	11%	7%	6%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $330M, roughly its depreciation, the rate its assets wear out). The other $354M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows. The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $64M), owner earnings is nearer $1.6B.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 30.8×

Comfortable

Operating income $2.5B ÷ interest expense $81M

What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
How heavy is the debt, net of cash? $1.9B · 0.8× operating profit

Modest net debt

Cash $585M − debt $2.5B

What this means
Netting $585M of cash and short-term investments against $2.5B of debt leaves $1.9B owed, about 0.8× a year's operating profit (1.0× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Is it a good business?

Return on invested capital 29%

Very high (≥25%) through the cycle

9-yr median, range 18%–41%; 32% latest = NOPAT $1.8B ÷ invested capital $5.6B

Industry peers: median 11%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 9 years (it ran 32% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 8%

Solid through the cycle

9-yr median margin, range 6%–11%; latest $1.7B = operating cash $2.0B − maintenance capex $330M

Industry peers: median 5%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 9% of revenue this year, a 8% median across 9 years. It chose to put $354M more into growth, so free cash flow this year was $1.3B — the gap is investment, not weakness. Treating stock comp as the real expense it is (less $64M of SBC) leaves $1.6B.
Are earnings backed by cash? 1.18×

Cash-backed

Cash from ops $2.0B ÷ net income $1.7B

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 90%

Returns about half

Dividends + buybacks $1.5B ÷ Owner Earnings $1.7B

What this means
Of $1.7B Owner Earnings, $1.5B (90%) went back to shareholders, $467M dividends, $1.0B buybacks. Net of $64M stock comp, the real buyback was about $981M. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 2.07×

Expanding

Capex $684M ÷ depreciation $330M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 6 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $17.9B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 2.83×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Pass

Debt ≤ working capital · $2.5B vs $3.5B WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Pass

A profit every year (9-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (9)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +146%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $38.44/share (latest year $36.13), the averaged base the calculator's gate runs on, and book value is $79.13/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2017–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 9 of 9

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Return on capital ≥ 15% 9 of 9 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 10% → 15% (3-yr avg ends)

What this means
Through the cycle the operating margin widened — about 10% early to 15% lately, median 12% — pricing power intact or improving.
Reinvestment, incremental ROIC —

What this means
The reinvested base moved too little against the change in profit to read a reliable return on it here — the figure would be a small-denominator artifact, not a moat. Judge this one on the owner-earnings record and the cash it returns instead.
Owner earnings growth +10%/yr

What this means
Owner earnings grew about 10% a year over the record.
Worst year 2020 · 8.6% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count −2.3%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.

Does AI threaten the moat?

Moderate contestability

AI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.

In its own filing Named as a competitive risk

Its FY2025 10-K names artificial intelligence as a competitive threat.

“The proliferation of AI may impact our industry and the markets in which we compete, and the development and use of AI presents competitive, reputational and liability risks.”

The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$5.9B

Cash & short-term investments$695M
Receivables$2.6B
Inventory$2.4B
Other current assets$200M

Current liabilities$2.2B

Debt due within a year$2M
Other current liabilities$2.2B

Current ratio2.69×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.60×stricter: inventory excluded

Cash ratio0.32×strictest: cash alone against what's due

Working capital$3.7Bthe cushion left after near-term bills

Debt due this year vs. cash$2M due · $695M cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago+10.1%the freshest read on whether the business is still growing

Current ratio, recent quarters2.3× → 2.7×

Deeper floors

Tangible book value$3.3Bequity stripped of goodwill & intangibles

Debt incl. operating leases$2.8B$370M of it operating leases; with finance leases, “total fixed claims” below reaches $2.9B (annual-report basis)

From the company's latest filing.

Debt maturity

the debt note, SEC EDGAR →

Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.

'26$126M

'27$0

'28$0

'29$0

'30$0

later$2.4B

Bars scaled to the largest single year; “later” is everything due after 2030, shown apart since it dwarfs the years.

Due in the next 12 months$126Mthe first rung: what must be repaid or rolled over within the year

Within two years$126Mthe near wall, the part most exposed to today’s credit conditions

Biggest single year$126Min 2026the lumpiest maturity, where a refinancing, if needed, is largest

Total scheduled principal$2.5Bevery year plus what lies beyond, as the footnote totals it

Against what the business has and earns

Cash & short-term investments, Mar 31, 2026$695M

One year of owner earnings (FY2025)$1.7B

Together, against $126M due next year18.9×

Cash on hand as of Mar 31, 2026 plus a year’s owner earnings comes to $2.4B against the $126M due in the twelve months after the Dec 31, 2025 schedule: 19 times it.

Maturity schedule extracted from the company’s Dec 31, 2025 annual report and reconciled to the total the table states.

Lease obligations

the lease note, SEC EDGAR →

Debt by another name. What the business owes on the property, aircraft, stores and equipment it rents rather than owns is a fixed claim due on a schedule; added back to the debt, it is the true leverage. That ladder, and what it adds to the debt on the page above.

'26$86M

'27$79M

'28$71M

'29$59M

'30$48M

later$69M

Lease payments by year, scaled to the largest; “later” is everything beyond year five, shown apart. These are the contractual cash payments, before the interest the filing imputes back out to the balance-sheet liability.

Due in the next 12 months$86Ma fixed cash payment, owed whether or not the business has a good year

Total lease payments$412Mevery year plus the tail, undiscounted: the full cash the leases will take

On the balance sheet$374Mthe present value of those payments, the recognised lease liability

True leverage: debt plus leases

On-balance-sheet debt$2.5B

Lease obligations (present value)$374M

Total fixed claims on the business$2.9B

Counting the leases the way Buffett does, the fixed claims on this business come to $2.9B, of which the leases are 13%. The lease wall above and the debt schedule together are the calendar of what must be paid, and when.

Lease ladder read from the ASC 842 tags in the company’s Dec 31, 2025 annual report and reconciled: the yearly buckets sum to the undiscounted total, which less the imputed interest equals the balance-sheet liability; a ladder that doesn’t tie out is withheld.

How the cash was used, 2017–2025

Over the record, the business generated $12.7B of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.

Reinvested$3.1B · 24%
Dividends$3.3B · 26%
Buybacks$6.7B · 53%

Returned to owners$10.0B
96% of the owner earnings the business produced over the span, $3.3B as dividends and $6.7B as buybacks.
Source of funding−$387M
Reinvestment and shareholder returns ran $387M beyond the operating cash the business generated, so the gap was financed off the balance sheet: debt rose from $2.3B to $2.4B.
Average price paid for buybacks—
Buybacks ran $6.7B over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count−18.3%
The diluted count fell from 58M to 47M, so the buybacks outran the stock issued to staff.
Dividend record$9.73/sh
Paid in 9 of the years on record, the per-share dividend growing about 8% a year. It was never cut over the span.
Return on what it retained—
Not read here: owner earnings are negative over the span, or the company returned nearly all its earnings rather than retaining them, so there is too little retained to measure a return on.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 9-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$625M7% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity10%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$0over 9 years buying other businesses, against $3.1B of capital spent building

$293M written down across 4 years (2017, 2018, 2019, 2020): goodwill the company has already conceded it overpaid for, charged against earnings. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 9-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	D.G. Macpherson	$9.0M	$16.3M	$764M
2022	D.G. Macpherson	$10.0M	$14.3M	$1.1B
2023	D.G. Macpherson	$10.2M	$23.0M	$1.8B
2024	D.G. Macpherson	$10.9M	$15.8M	$1.8B
2025	D.G. Macpherson	$11.6M	$9.1M	$1.7B

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership6.3%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
CEO pay ratio172:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
Stock-based compensation$64M
The slice of the business handed to employees in shares this year, 0% of revenue, equal to 3% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why W.W. Grainger Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2017–2025.

1 of the 6 tests turned up something to look into; the other 5 came back clean.

Look hereAre "one-time" charges a yearly habit?5 of 9 years
Management took an impairment or write-down in 5 of the last 9 years, $610M in all. Taken across the majority of the record, the "one-time" label is wearing thin — ask whether these are past deals coming due rather than genuinely isolated events. Read it beside the goodwill the company still carries.

And these came back clean

Is it less profitable than it was?
Did the share count rise anyway?
Did debt outgrow the business?
Did reported profit become cash?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Trading Companies & Distributors

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
GPCGenuine Parts Company	$24.3B	35%	7.1%	15%	5%
WCCWESCO Intl	$23.5B	20%	4.5%	8%	2%
AVTAvnet Inc.	$22.2B	12%	2.3%	7%	1%
GWWW.W. Grainger Inc.	$17.9B	39%	11.9%	29%	8%
TELTE Connectivity plc	$17.3B	33%	16.3%	15%	13%
RSReliance Inc.	$14.3B	29%	8.3%	11%	7%
LKQLKQ Corporation	$13.7B	39%	8.5%	8%	6%
HSICHenry Schein Inc.	$13.2B	31%	6.1%	13%	5%
Group median	—	32%	7.7%	12%	6%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what W.W. Grainger Inc. has delivered.

W.W. Grainger Inc.’s latest year runs above its own through-cycle margin — the reported figure may flatter a peak. So the tool opens on the through-cycle base, Graham’s averaging cutting both ways; clear the toggle below to read the latest year exactly as reported.

Today’s price $

Through the cycle, W.W. Grainger Inc. earns about $1.4B on its 7.8% median owner-earnings margin. This year’s 9.4% margin runs above that; the reported figure may flatter a peak you'd be paying on. Normalize, below, values the price on that through-cycle figure rather than the latest year. It comes pre-checked here for that reason, the same rule that already normalizes a trough; clear it to price the year as filed.

Base Normalize · through-cycle ($1.4B) Net of stock comp (−$66M) Steady-state · maintenance capex ($1.8B)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25+17%/yr

Owner-earnings growth · ’17→’25+7%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $1.4B on 47M shares outstanding, per the 10-Q cover, as of 2026-04-30; net debt $1.7B. The base opens on the through-cycle figure (the latest year sits above the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. Capex ($729M) runs well above depreciation ($331M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $1.8B, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh GWW against another business →

Cite: Owner Scorecard, "W.W. Grainger Inc. (GWW), the owner's record," https://ownerscorecard.com/c/GWW, data as of 2026-07-09.

Manual order: ← GWRE its page in the Manual GXO →

Industry order: ← GPC the Trading Companies & Distributors chapter HRI →