Griffon Corp (NYSE: GFF)

Sector: Industrials Industry: Building Products & Equipment CIK: 0000050725
Market Cap 4.11 Bn
P/B 37.75
P/E 92.07
P/S 1.62
ROIC (Qtr) 8.94
Div Yield % 0.83
Rev 1y % (Qtr) 2.64
Total Debt (Qtr) 1.55 Bn
Debt/Equity (Qtr) 14.21
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About

Griffon Corporation, commonly known as Griffon, is a diversified management and holding company that operates in the home improvement and building products industries. The company, which was founded in 1959 and is listed on the New York Stock Exchange under the ticker symbol GFF, generates revenue primarily through the sale of its products and services. Griffon's main business activities are conducted through its two reportable segments: Home and Building Products (HBP) and Consumer and Professional Products (CPP). The HBP segment operates through...

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Investment thesis

Bull case

  • Healthy cash reserves of 95.28M provide 2.24x coverage of short-term debt 42.49M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 321.51M provides strong 12.12x coverage of stock compensation 26.53M, indicating sustainable incentive practices.
  • Robust free cash flow of 279.65M exceeds capital expenditure of 41.85M by 6.68x, indicating strong organic growth funding capability.
  • Operating cash flow of 321.51M provides solid 0.94x coverage of current liabilities 341.84M, showing strong operational health.
  • Operating cash flow of 321.51M fully covers other non-current liabilities 98.65M by 3.26x, showing strong long-term stability.

Bear case

  • Operating cash flow of 321.51M barely covers its investment activities of (41.85M), with a coverage ratio of -7.68, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 95.28M against inventory of 440.32M, the 0.22 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 321.51M provides thin coverage of dividend payments of (41.85M) with a -7.68 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 279.65M represents just -2.23x of debt issuance (125.65M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of 321.51M is outpaced by equity issuance of (164.50M) (-1.95 ratio), indicating concerning reliance on equity markets for funding operations.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Building Products & Equipment
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TT Trane Technologies plc 104.89 Bn 35.94 4.92 4.62 Bn
2 JCI Johnson Controls International plc 91.64 Bn 26.98 3.82 9.71 Bn
3 CARR CARRIER GLOBAL Corp 56.66 Bn 38.18 2.61 12.25 Bn
4 LII Lennox International Inc 19.91 Bn 24.71 3.83 1.77 Bn
5 CSL Carlisle Companies Inc 17.50 Bn 23.63 3.49 2.88 Bn
6 MAS Masco Corp /De/ 15.94 Bn 19.68 2.11 3.17 Bn
7 OC Owens Corning 13.83 Bn 13.90 1.63 5.61 Bn
8 WMS Advanced Drainage Systems, Inc. 13.26 Bn 28.18 4.44 1.45 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.73 2.00
EV to Cash from Ops. EV/CFO 17.43 13.48
EV to Debt EV to Debt 3.62 10.94
EV to EBIT EV/EBIT 26.29 24.16
EV to EBITDA EV/EBITDA 20.70 -11.14
EV to Free Cash Flow [EV/FCF] EV/FCF 20.04 46.78
EV to Market Cap EV to Market Cap 1.36 1.12
EV to Revenue EV/Rev 2.21 2.81
Price to Book Value [P/B] P/B 37.75 4.24
Price to Earnings [P/E] P/E 92.07 47.40
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.07 0.80
Dividend Payout Ratio % Div Payout % (Qtr) 76.00 11.22
Dividend per Basic Share Div per Share (Qtr) 0.76 0.71
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 12.13 10.90
Interest Coverage Int. cover (Qtr) 2.29 111.58
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -3.06 -24.93
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -37.30 61.26
Dividend Growth (1y) % Div 1y % (Qtr) 20.63 1.67
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -74.62 -186.82
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -44.55 -57.93
EBIT Growth (1y) % EBIT 1y % (Qtr) -51.29 -102.26
EBT Growth (1y) % EBT 1y % (Qtr) -64.09 -299.15
EPS Growth (1y) % EPS 1y % (Qtr) -80.39 -598.34
FCF Growth (1y) % FCF 1y % (Qtr) -16.84 89.70
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 1.23 -3.62
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.23 0.88
Cash Payout Ratio Cash Payout (Qtr) 0.12 0.13
Cash Ratio Cash Ratio (Qtr) 0.28 1.57
Current Ratio Curr Ratio (Qtr) 2.56 3.42
Debt to Equity Ratio Debt/Equity (Qtr) 14.21 0.79
Interest Cover Ratio Int Coverage (Qtr) 2.29 111.58
Times Interest Earned Times Interest Earned (Qtr) 2.29 111.58
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 10.90 3.54
EBIT Margin % EBIT Margin % (Qtr) 8.40 1.23
EBT Margin % EBT Margin % (Qtr) 4.73 -1.76
Gross Margin % Gross Margin % (Qtr) 41.80 28.65
Net Profit Margin % Net Margin % (Qtr) 1.80 -3.80