Griffon Profitability Analysis

GFF Stock  USD 70.46  2.40  3.29%   
Considering Griffon's profitability and operating efficiency indicators, Griffon may not be well positioned to generate adequate gross income at this time. It has a very high probability of underperforming in August. Profitability indicators assess Griffon's ability to earn profits and add value for shareholders.
 
Net Income  
First Reported
1989-12-31
Previous Quarter
42.2 M
Current Value
64.1 M
Quarterly Volatility
40.9 M
 
Oil Shock
 
Dot-com Bubble
 
Housing Crash
 
Credit Downgrade
 
Yuan Drop
 
Covid
At this time, Griffon's EV To Sales is most likely to increase slightly in the upcoming years. The Griffon's current Operating Cash Flow Sales Ratio is estimated to increase to 0.15, while Sales General And Administrative To Revenue is projected to decrease to 0.14. At this time, Griffon's Net Income is most likely to increase significantly in the upcoming years. The Griffon's current Income Tax Expense is estimated to increase to about 42.3 M, while Total Other Income Expense Net is forecasted to increase to (80.4 M).
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.210.32
Way Down
Slightly volatile
Operating Profit Margin0.06290.0843
Way Down
Slightly volatile
For Griffon profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Griffon to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Griffon utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Griffon's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Griffon over time as well as its relative position and ranking within its peers.
  

Griffon's Revenue Breakdown by Earning Segment

Check out Risk vs Return Analysis.
For more detail on how to invest in Griffon Stock please use our How to Invest in Griffon guide.
Is Building Products space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Griffon. If investors know Griffon will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Griffon listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.07)
Dividend Share
0.55
Earnings Share
3.78
Revenue Per Share
52.934
Quarterly Revenue Growth
(0.05)
The market value of Griffon is measured differently than its book value, which is the value of Griffon that is recorded on the company's balance sheet. Investors also form their own opinion of Griffon's value that differs from its market value or its book value, called intrinsic value, which is Griffon's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Griffon's market value can be influenced by many factors that don't directly affect Griffon's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Griffon's value and its price as these two are different measures arrived at by different means. Investors typically determine if Griffon is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Griffon's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Griffon Return On Asset vs. Return On Equity Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Griffon's current stock value. Our valuation model uses many indicators to compare Griffon value to that of its competitors to determine the firm's financial worth.
Griffon is one of the top stocks in return on equity category among its peers. It is rated # 3 in return on asset category among its peers reporting about  0.17  of Return On Asset per Return On Equity. The ratio of Return On Equity to Return On Asset for Griffon is roughly  5.78 . At this time, Griffon's Return On Equity is most likely to increase slightly in the upcoming years. Comparative valuation analysis is a catch-all technique that is used if you cannot value Griffon by discounting back its dividends or cash flows. It compares the stock's price multiples to nearest competition to determine if the stock is relatively undervalued or overvalued.

Griffon Return On Asset vs. Return On Equity

Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.

Griffon

Return On Equity

 = 

Net Income

Total Equity

 = 
0.59
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Return on Asset or ROA shows how effective is the management of the company in generating income from utilizing all of the assets at their disposal. It is a useful ratio to evaluate the performance of different departments of a company as well as to understand management performance over time.

Griffon

Return On Asset

 = 

Net Income

Total Assets

 = 
0.1
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive and therefore will needs more money to continue generating revenue in the future.

Griffon Return On Asset Comparison

Griffon is currently under evaluation in return on asset category among its peers.

Griffon Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Griffon, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Griffon will eventually generate negative long term returns. The profitability progress is the general direction of Griffon's change in net profit over the period of time. It can combine multiple indicators of Griffon, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income-63 M-59.9 M
Operating Income226.4 M237.7 M
Income Before Tax101.4 M106.5 M
Total Other Income Expense Net-84.6 M-80.4 M
Net Income69.9 M73.3 M
Income Tax Expense40.3 M42.3 M
Net Income Applicable To Common Shares69.9 M73.3 M
Net Income From Continuing Ops69.9 M73.3 M
Non Operating Income Net OtherM3.1 M
Interest Income2.4 M2.3 M
Net Interest Income-89.4 M-93.9 M
Change To Netincome180.8 M189.9 M
Net Income Per Share 1.71  1.80 
Income Quality 6.35  6.67 
Net Income Per E B T 0.62  0.65 

Griffon Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Griffon. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Griffon position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Griffon's important profitability drivers and their relationship over time.

Griffon Profitability Trends

Griffon profitability trend refers to the progression of profit or loss within a business. An upward trend means that Griffon's profit has generally increased over time, and a downward profitability trend means profits are declining. Recognizing problems early in profitability trends allows investors to address revenue and cost issues in advance. Investors and analysts usually monitor three types of profitability trends: gross, operating, and net. Gross profit is the difference between revenue and costs of goods sold. Operating profit is Griffon's gross profit minus its overhead. After you account for other unusual revenue, expenses, and costs, you get net profit. Gross profit trends are often a good indicator of future profitability. If you have high gross profit margins, you have a better chance to cover overhead and make money.

Griffon Profitability Drivers Correlations

One of the toughest challenges investors face today is learning how to quickly synthesize and read into endless financial statements and information provided by the company, SEC reporting, and various external parties. Understanding the correlation between Griffon different financial indicators related to revenue and profit generation helps investors identify and prioritize their investing strategies towards Griffon in a much-optimized way. Analyzing correlations between profit drivers that are directly associated with dollar figures is the most effective way to break down Griffon's future profitability.

Use Griffon in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Griffon position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Griffon will appreciate offsetting losses from the drop in the long position's value.

Griffon Pair Trading

Griffon Pair Trading Analysis

The ability to find closely correlated positions to Griffon could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Griffon when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Griffon - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Griffon to buy it.
The correlation of Griffon is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Griffon moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Griffon moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Griffon can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Griffon position

In addition to having Griffon in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

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Healthcare
Healthcare Theme
Fama and French investing themes focus on testing asset pricing under different economic assumptions. The Healthcare theme has 61 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Healthcare Theme or any other thematic opportunities.
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Additional Information and Resources on Investing in Griffon Stock

When determining whether Griffon is a strong investment it is important to analyze Griffon's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Griffon's future performance. For an informed investment choice regarding Griffon Stock, refer to the following important reports:
Check out Risk vs Return Analysis.
For more detail on how to invest in Griffon Stock please use our How to Invest in Griffon guide.
You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
To fully project Griffon's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Griffon at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Griffon's income statement, its balance sheet, and the statement of cash flows.
Potential Griffon investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Griffon investors may work on each financial statement separately, they are all related. The changes in Griffon's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Griffon's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.