Griffon Corp (GFF) stock analysis

P/E above its 5-year median

Griffon's P/E of 27.1 is above its own 5-year median of 18.2.

P/E above the industry

Griffon's P/E of 27.1 is above the Fabricated Metal Products, except Machinery and Transportation Equipment median of 22.3.

EV/EBITDA above its 5-year median

Griffon's EV/EBITDA of 12.1 is above its 5-year median of 12.0.

P/B above the industry

Griffon's price-to-book of 37.23 is above the Fabricated Metal Products, except Machinery and Transportation Equipment median of 2.67.

Trading above fair value

The share price of $106.16 is above our fair value estimate of $89.74.

Margin of safety under 20%

The price is 18.3% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -4.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings growth accelerating

Net income grew 156% over the last twelve months, against a 5-year average of -0.9% a year.

Growing faster than the industry

Revenue grew 26.9% over the last twelve months; the Fabricated Metal Products, except Machinery and Transportation Equipment median is 9.7%.

Guidance raised

Griffon raised its Fiscal year 2026 interest expense outlook on Aug 5, 2026.

Gross margin slipping

Gross margin was 40.5% over the last twelve months, against 43.6% a year earlier.

Return on equity over 15%

Return on equity was 185% over the last twelve months and averaged 22.4% over five years.

Return on capital over 10%

Return on invested capital was 20.4%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Griffon's return on equity of 185% is above the Fabricated Metal Products, except Machinery and Transportation Equipment median of 0.9%.

Earnings shrank over 5 years

Net income shrank 0.9% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 6.5% over the last twelve months, against a 5-year average of 1.9%.

Net margin above the industry

Griffon's net margin of 6.5% is above the Fabricated Metal Products, except Machinery and Transportation Equipment median of 0.5%.

High debt

Debt is 981% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 150% five years ago to 981%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 26.9% of total debt.

Interest well covered

Operating income covers interest expense 5.2 times.

Short-term assets cover short-term debts

Current assets are 2.41 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.29; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Griffon paid dividends worth 0.8% of the share price over the last twelve months.

Yield below Treasuries

The 0.8% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Griffon yields 0.8%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 21.8% of net income.

Covered by free cash flow

Dividends take 13.1% of free cash flow.