VOL. XCIV, NO. 247
★ WIDE MOAT STOCKS & COMPETITIVE ADVANTAGES ★
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Friday, January 2, 2026
Ferguson Enterprises Inc.
FERG · New York Stock Exchange
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
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Overview
Ferguson Enterprises Inc. (FERG) is a North American value-added distributor serving the water and air specialized professional across residential and non-residential construction. The core moat is supply-side: dense physical distribution (branches/DCs/fleet) enabling fast fulfillment and high service levels that matter to contractors. Scale procurement/logistics and broad assortment plus value-added services (including digital/system-to-system ordering and project support) reinforce share-of-wallet and workflow stickiness in fragmented markets. Key risks include competitive price pressure from local and lower-service models, execution risk in network/technology investments, and construction-cycle sensitivity (including commodity-driven deflation/inflation effects).
Primary segment
United States
Market structure
Competitive
Market share
—
HHI: —
Coverage
2 segments · 10 tags
Updated 2026-01-01
Segments
United States
Value-added distribution of plumbing, HVAC, PVF, waterworks and related products/services
Revenue
95.1%
Structure
Competitive
Pricing
moderate
Share
—
Peers
Canada
Value-added distribution of plumbing, HVAC/refrigeration, PVF and water/wastewater treatment products
Revenue
4.9%
Structure
Competitive
Pricing
weak
Share
—
Peers
Moat Claims
United States
Value-added distribution of plumbing, HVAC, PVF, waterworks and related products/services
Revenue and operating-profit shares computed from FY2025 segment net sales ($29.269B) and segment adjusted operating profit ($2.840B) vs totals in the FY2025 Form 10-K.
Physical Network Density
Supply
Physical Network Density
Strength
Durability
Confidence
Evidence
Dense branch plus distribution center network and fleet enable time-critical fulfillment (same/next-day availability), which is a key requirement for trade customers.
Erosion risks
- E-commerce/direct-ship reducing the value of local inventory
- Competitors investing in comparable delivery and automation
- Rising labor and fleet costs compressing service economics
Leading indicators
- Branch / DC footprint changes (openings, closures, consolidation)
- On-time delivery and same/next-day service levels
- Delivery cost per order and gross margin trend
Counterarguments
- Large competitors can replicate density via build-outs or acquisitions
- Many contractors multi-source, limiting exclusivity of the network advantage
Scale Economies Unit Cost
Supply
Scale Economies Unit Cost
Strength
Durability
Confidence
Evidence
Large-scale procurement and logistics (very broad supplier base, import capability, and a large fulfillment footprint) support availability and cost efficiency in a fragmented market.
Erosion risks
- Supplier consolidation reducing rebates and favorable terms
- Commodity inflation/deflation timing mismatches hurting margins
- Trade restrictions/tariffs affecting import economics
Leading indicators
- Supplier rebate/benefit rates and gross margin trend
- Inventory turns and fill-rate metrics
- Working capital efficiency vs sales
Counterarguments
- Other large distributors also have scale; advantage may be incremental
- Price competition can force pass-through of scale benefits to customers
Scope Economies
Supply
Scope Economies
Strength
Durability
Confidence
Evidence
Broad assortment across plumbing, HVAC, PVF, and water/wastewater plus value-added services enables more complete project coverage and higher share-of-wallet for customers.
Erosion risks
- Specialists or niche distributors winning categories on depth/price
- Manufacturers expanding direct-to-contractor programs
- Service differentiation eroding if competitors add similar capabilities
Leading indicators
- Cross-category attachment (multi-line account penetration)
- Mix shift toward higher value-added solutions
- Customer retention in project-heavy non-residential categories
Counterarguments
- Best-of-breed suppliers can win on expertise in specific niches
- Large contractors can formalize multi-vendor procurement frameworks
Data Workflow Lockin
Demand
Data Workflow Lockin
Strength
Durability
Confidence
Evidence
Digital commerce and system-to-system capabilities, plus project-based billing and after-sales support, can embed Ferguson into customer procurement workflows and reduce switching.
Erosion risks
- Standardized e-procurement making integrations portable
- Marketplaces/aggregators disintermediating distributors
- IT outages/cyber incidents undermining customer trust
Leading indicators
- Digital sales penetration and growth
- Adoption of system-to-system integrations among large accounts
- IT reliability (major incidents) and customer satisfaction metrics
Counterarguments
- Customers can multi-home suppliers even with integrations
- Commodity-like SKUs reduce the stickiness of workflow features
Canada
Value-added distribution of plumbing, HVAC/refrigeration, PVF and water/wastewater treatment products
Revenue and operating-profit shares computed from FY2025 segment net sales ($1.493B) and segment adjusted operating profit ($66M) vs totals in the FY2025 Form 10-K.
Physical Network Density
Supply
Physical Network Density
Strength
Durability
Confidence
Evidence
A meaningful branch footprint supports availability and service to contractors, though with lower density/scale than the U.S. segment.
Erosion risks
- Local competitors matching delivery speed in key metros
- Higher logistics costs across wide geographies
- Construction cycle downturns reducing branch productivity
Leading indicators
- Canada segment sales growth vs Canadian construction indicators
- Branch/DC productivity (sales per location)
- Service levels (fill rate, delivery timeliness)
Counterarguments
- Network effects are weaker at smaller scale
- Contractors can shift spend among distributors relatively quickly
Scope Economies
Supply
Scope Economies
Strength
Durability
Confidence
Evidence
Broad offering across plumbing, HVAC/refrigeration, water/wastewater and PVF helps serve multiple contractor needs under one relationship.
Erosion risks
- Category specialists taking share in niches
- Supplier direct programs bypassing distribution
- Price-first competition in commoditized categories
Leading indicators
- Cross-sell penetration across product families
- Share of value-added services in Canada mix
- Gross margin stability vs competitive intensity
Counterarguments
- Breadth is less differentiating if customers prefer specialists
- Some categories are easily substitutable and price-driven
Evidence
As of 2025-07-31: 1,519 U.S. branches; same/next-day availability described as a competitive advantage.
Supports a fulfillment-speed moat created by a dense physical network close to customers.
Discloses ~37,000 suppliers (no supplier >5% of inventory purchases) and a large branch/DC/fleet footprint across North America.
Scale improves resilience (supplier diversification) and supports unit-cost advantages in purchasing and distribution.
Describes product breadth (plumbing/HVAC to PVF and water solutions) and value-added services (e.g., fabrication and project support).
A wider catalog plus services reduce the need for customers to stitch together multiple suppliers for complex projects.
Highlights digital commerce and system-to-system capabilities, plus project-based billing and MRO/after-sales support.
Workflow integration and billing/returns/credit processes can create switching friction beyond product price.
As of 2025-07-31: Canada segment operated 227 branches plus a regional DC and an MDC.
Supports a service-and-availability moat from physical presence close to customers.
Showing 5 of 6 sources.
Risks & Indicators
Erosion risks
- E-commerce/direct-ship reducing the value of local inventory
- Competitors investing in comparable delivery and automation
- Rising labor and fleet costs compressing service economics
- Supplier consolidation reducing rebates and favorable terms
- Commodity inflation/deflation timing mismatches hurting margins
- Trade restrictions/tariffs affecting import economics
Leading indicators
- Branch / DC footprint changes (openings, closures, consolidation)
- On-time delivery and same/next-day service levels
- Delivery cost per order and gross margin trend
- Supplier rebate/benefit rates and gross margin trend
- Inventory turns and fill-rate metrics
- Working capital efficiency vs sales
Curation & Accuracy
This directory blends AI‑assisted discovery with human curation. Entries are reviewed, edited, and organized with the goal of expanding coverage and sharpening quality over time. Your feedback helps steer improvements (because no single human can capture everything all at once).
Details change. Pricing, features, and availability may be incomplete or out of date. Treat listings as a starting point and verify on the provider’s site before making decisions. If you spot an error or a gap, send a quick note and I’ll adjust.