VOL. XCIV, NO. 247
WIDE MOAT STOCKS & COMPETITIVE ADVANTAGES
Ferguson Enterprises Inc. FERG
NYSEIndustrial distributionFinancials to Jun 30, 2026 · Updated Oct 7, 2026
Moat ranks
Balance sheet
| $B | Jul '25 | Jun '26 |
|---|---|---|
| Cash | 0.7 | 0.4 |
| Securities | 0.0 | 0.0 |
| Debt | 4.2 | 4.9 |
| Net cash | -3.5 | -4.5 |
| Equity | 5.8 | 6.2 |
- Debt / EBITDA · 7/31/25
- 1.65×
- Debt / equity
- 0.79×
- Leases (6/30/26)
- $2.0B
- Diluted shares
- 199M
- Book value / share
- $31.13
- Price / book
- 7.0×
- Net cash / share
- −$22.53
- Market cap
- $43.2B
- Enterprise value
- $47.7B
Per-share record
Key indicators
| Indicator | Latest | Vs year ago | Last 8 quarters |
|---|---|---|---|
| Revenue growth | – | – | |
| Operating margin | 10.2% | – | |
| FCF margin | -2.3% | – | |
| Capex / revenue | 1.6% | – | |
| U.S. organic sales growth | +4% | – | – |
| Canadian organic sales growth | +2% | – | – |
| U.S. non-residential sales growth | +8% | – | – |
| U.S. branches · 12/31/25 | 1,517 | – | |
| Canadian branches · 12/31/25 | 212 | – |
Margins and growth from reported quarters; company KPIs as reported in results releases.
About FERG
Ferguson distributes plumbing, HVAC, waterworks and industrial flow-control products to North American contractors. The U.S. contributed 95.1% of revenue in the latest full July fiscal year.
- Physical Network Density
Dense branch plus distribution center network and fleet enable time-critical fulfillment (same/next-day availability), which is a key requirement for trade customers.
- Scale Economies Unit Cost
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.
- Scope Economies
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.
- Physical Network Density
A meaningful branch footprint supports availability and service to contractors, though with lower density/scale than the U.S. segment.
- Aug 31, 2026
Ferguson completed the FloWorks acquisition, adding technical valves, automation and fluid-handling services and expanding non-residential project coverage.
- Aug 10, 2026
Ferguson raised calendar 2026 guidance after Q2 sales rose 4.6%; the outlook excluded FloWorks and raised the adjusted margin floor to 9.5%.
- Jul 20, 2026
Ferguson cancelled its secondary London listing, leaving its NYSE common shares as the listed equity.
- Jul 13, 2026
Ferguson agreed to buy FloWorks for $1.6 billion to expand industrial flow-control services and repair demand.
- Jan 1, 2026
Ferguson began a December year-end fiscal calendar after a five-month transition, changing the comparison dates for quarterly and annual results.
Ownership
Go deeper on FERG
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- Read FERG's earnings callsTranscripts and audio of results calls, with management's own words.16 tools
- Investing tool dealsCurrent discounts on research, charting and tracking tools.80 deals
On this page
Financial record
| Fiscal year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Trend | Change 2016–25 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Per share ($) | ||||||||||||
| Revenue | 71.83 | 76.19 | 83.85 | 85.08 | 87.92 | 101.39 | 130.50 | 143.50 | 145.63 | 154.43 | +8.9%/yr | |
| Cash flow | – | 3.75 | 4.19 | 5.56 | 6.40 | 5.95 | 5.25 | 13.16 | 9.20 | 9.58 | – | |
| Earnings | 2.63 | 4.16 | 3.40 | 4.49 | 4.29 | 7.25 | 9.59 | 9.12 | 8.53 | 9.32 | +15.1%/yr | |
| Free cash flow | – | 2.87 | 2.98 | 3.76 | 5.15 | 4.88 | 3.92 | 11.03 | 7.38 | 8.05 | – | |
| Capex | – | 0.89 | 1.21 | 1.80 | 1.25 | 1.07 | 1.32 | 2.13 | 1.83 | 1.53 | – | |
| Dividends | – | 1.30 | 5.49 | 1.94 | 1.44 | 4.61 | 2.46 | 3.43 | 3.85 | 2.45 | – | |
| Book value | 15.05 | 17.95 | 16.40 | 18.76 | 20.32 | 22.26 | 21.31 | 24.31 | 27.60 | 29.28 | +7.7%/yr | |
| Diluted shares (M) | 255 | 253 | 248 | 232 | 227 | 225 | 219 | 207 | 204 | 199 | -2.7%/yr | |
| Totals ($B) | ||||||||||||
| Revenue | 18.3 | 19.3 | 20.8 | 19.7 | 19.9 | 22.8 | 28.6 | 29.7 | 29.6 | 30.8 | +5.9%/yr | |
| Operating income | 1.1 | 1.5 | 1.4 | 1.4 | 1.4 | 2.0 | 2.8 | 2.7 | 2.7 | 2.6 | +10.6%/yr | |
| Net income | 0.7 | 1.1 | 0.8 | 1.0 | 1.0 | 1.6 | 2.1 | 1.9 | 1.7 | 1.9 | +11.9%/yr | |
| Free cash flow | – | 0.7 | 0.7 | 0.9 | 1.2 | 1.1 | 0.9 | 2.3 | 1.5 | 1.6 | – | |
| Buybacks | – | 0.0 | 0.7 | 0.3 | 0.5 | 0.4 | 1.5 | 0.9 | 0.6 | 0.9 | – | |
| Dividends | – | 0.3 | 1.4 | 0.4 | 0.3 | 1.0 | 0.5 | 0.7 | 0.8 | 0.5 | – | |
| Net cash | – | -0.8 | -1.2 | -1.3 | -1.1 | -1.3 | -3.3 | -3.2 | -3.4 | -3.5 | – | |
| Margins & returns (%) | ||||||||||||
| Gross margin | – | 29.0 | 29.1 | 29.9 | 30.0 | 30.6 | 30.7 | 30.4 | 30.5 | 30.7 | – | |
| Operating margin | 5.7 | 7.7 | 6.6 | 7.0 | 6.9 | 8.6 | 9.9 | 8.9 | 8.9 | 8.5 | +2.7 pts | |
| Net margin | 3.7 | 5.5 | 4.1 | 5.3 | 4.9 | 7.2 | 7.3 | 6.4 | 5.9 | 6.0 | +2.4 pts | |
| FCF margin | – | 3.8 | 3.6 | 4.4 | 5.9 | 4.8 | 3.0 | 7.7 | 5.1 | 5.2 | – | |
| ROIC | – | 20.8 | 19.4 | 18.2 | 17.8 | 23.2 | 26.4 | 24.1 | 22.0 | 20.8 | – | |
| Return on equity | 17.5 | 23.2 | 20.7 | 24.0 | 21.1 | 32.6 | 45.0 | 37.5 | 30.9 | 31.8 | +14.3 pts | |
| Stock pay % of revenue | – | 0.1 | 0.2 | 0.2 | 0.1 | 0.3 | 0.2 | 0.2 | 0.2 | 0.1 | – | |
| Capex % of revenue | – | 1.2 | 1.4 | 2.1 | 1.4 | 1.1 | 1.0 | 1.5 | 1.3 | 1.0 | – | |
Change uses 2016 and 2025 only: compound annual growth for amounts, points for margins and returns, and the change in amount for net cash. A dash means no 2016 base. Trend shows the fiscal years.
Moat
Moat scorecard
- Strength
- Confidence
- Structure
- Competitive
- Durability
- durable
- Trajectory
- stable
- Pricing power
- moderate
- United States95.1%3 claims
- Canada4.9%1 claim
Moat claims
- Applies to
- United States
- Confidence
- Durability
- durable
- Trajectory
- stableas of Oct 7, 2026
Dense branch plus distribution center network and fleet enable time-critical fulfillment (same/next-day availability), which is a key requirement for trade customers.
The U.S. network had 1,517 branches at December 2025 versus 1,519 in July, while Q2 2026 U.S. organic sales rose 4%; service reach remains large but more sites alone do not prove a stronger moat.
- U.S. branches1,517
- Fleet vehicles~6,200
- U.S. organic sales growth+4%
- 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
- Applies to
- United States
- Confidence
- Durability
- medium
- Trajectory
- stableas of Oct 7, 2026
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.
Approximately 37,000 suppliers and a 31.0% Q2 2026 group gross margin support durable procurement scale; the 20-basis-point quarterly margin decline limits evidence of a widening cost advantage.
- Fleet vehicles~6,200
- Suppliers~37,000
- U.S. organic sales growth+4%
- Supplier consolidation reducing rebates and favorable terms
- Commodity inflation/deflation timing mismatches hurting margins
- Trade restrictions/tariffs affecting import economics
- FilingFerguson Q2 calendar 2026 Form 10-QAug 10, 2026
- FilingFerguson Enterprises Inc. Form 10-K (FY ended Jul 31, 2025) - Supplier base and logistics scaleSep 26, 2025
- Applies to
- United States
- Confidence
- Durability
- medium
- Trajectory
- wideningas of Oct 7, 2026
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.
FloWorks closed August 31, 2026, adding technical valves, automation and fluid-handling services; this broadens project coverage, although the expected cross-selling benefits are still unproven.
- Suppliers~37,000
- Unique products sold≥1,000,000
- U.S. organic sales growth+4%
- U.S. non-residential sales growth+8%
- Specialists or niche distributors winning categories on depth/price
- Manufacturers expanding direct-to-contractor programs
- Service differentiation eroding if competitors add similar capabilities
- NewsFerguson completes FloWorks acquisition; closed August 31Sep 1, 2026
- FilingFerguson Enterprises Inc. Form 10-K (FY ended Jul 31, 2025) - Product breadth and value-added servicesSep 26, 2025
- NewsFerguson Q2 2026 resultsAug 10, 2026
- Applies to
- Canada
- Confidence
- Durability
- medium
- Trajectory
- narrowingas of Oct 7, 2026
A meaningful branch footprint supports availability and service to contractors, though with lower density/scale than the U.S. segment.
Canadian branches fell from 227 in July to 212 in December 2025, and Q2 2026 sales fell 1.9%; the remaining local service network is useful but its coverage has contracted.
- Canadian branches212
- Fleet vehicles~6,200
- Canadian organic sales growth+2%
- Local competitors matching delivery speed in key metros
- Higher logistics costs across wide geographies
- Construction cycle downturns reducing branch productivity
Profile change log
- Oct 7, 2026 · business change
Ferguson completed the FloWorks acquisition, adding technical valves, automation and fluid-handling services and expanding non-residential project coverage.
- Oct 7, 2026 · business change
Ferguson raised calendar 2026 guidance after Q2 sales rose 4.6%; the outlook excluded FloWorks and raised the adjusted margin floor to 9.5%.
- Oct 7, 2026 · business change
Ferguson agreed to buy FloWorks for $1.6 billion to expand industrial flow-control services and repair demand.
- Oct 7, 2026 · business change
Ferguson cancelled its secondary London listing, leaving its NYSE common shares as the listed equity.
- Oct 7, 2026 · business change
Ferguson began a December year-end fiscal calendar after a five-month transition, changing the comparison dates for quarterly and annual results.
- Oct 7, 2026 · business change
Ferguson established its U.S. parent through a common-control merger; the operating business continued without an acquisition accounting reset.
- Oct 7, 2026 · analyst revision
Replaced quarterly revenue weights with full FY2025 segment weights, removed adjusted profit shares that excluded central costs, and added sourced trajectories, market context and an investment debate. Four existing moat claims and their ratings remain unchanged.
Industry & peers
Peer map
Hover a point for its values; click a peer to compare. Dashed lines: industry medians.
North American water, air and flow distribution
Wholesale distribution of plumbing, HVAC, pipes, valves, waterworks and related project products and technical services to North American residential, commercial, infrastructure and industrial contractors. Excludes manufacturer revenue and the contractor’s installation charge.
- Ferguson
- Winsupply
- Reece USA
- Hajoca
- W.W. Grainger
- F.W. Webb
| Stocks | Moat | Gross m. | Op. m. | |
|---|---|---|---|---|
| FERG | 81 | 30.7% | 8.5% | |
| Industry median | 4 | 78 | 30.1% | 10.1% |
| Sector median | 88 | 76 | 37.0% | 17.5% |
| All stocks median | 398 | 76 | 52.9% | 19.6% |
Moat medians cover every stock. Margin medians count only stocks with collected numbers and need at least three.
Drivers & risks
- Urgent repair and maintenance create repeat demand and make nearby inventory valuable. Large installed building and water-system bases reduce reliance on new construction.
- Lower interest rates can improve housing affordability and release deferred building and renovation projects. This is a material demand channel, rather than a disclosed earnings sensitivity.
- Water infrastructure renewal, data centers, semiconductor facilities and power investment expand complex project demand and the value of technical flow-control support.
- Acquisitions can add local relationships and complementary products to shared logistics. FloWorks broadens the industrial service and repair opportunity, but cross-selling requires execution.
- Efficiency and refrigerant changes increase product and training complexity, supporting technical distribution while changing the equipment mix.
- High rates or a recession reduce new construction and optional renovation work. Fixed branch and fleet costs make a volume downturn more damaging than nominal price growth suggests.
- Steel, copper, plastics and tariffs change purchase prices and customers’ affordability. Pricing lag and supplier rebates can move gross profit independently of unit demand.
- National chains, manufacturer-owned stores and local specialists compete for customers who can use more than one distributor. A broad catalog alone does not lock customers in.
- Large acquisitions increase debt and integration demands. Customer losses, inventory errors or disruption to local teams can erase expected service and cost benefits.
- Safety, product liability, refrigerant regulation and labor shortages add operating costs. Canadian exchange-rate changes affect translated sales and sourcing but are less material than the U.S. building cycle.
Bulls & bears
Can local service and broader industrial capabilities deliver profitable organic share gains through a weak housing cycle without tying up too much capital?
Arguments
What to watch
- 1U.S. organic sales and residential versus non-residential demand
- 2Gross profit, operating cash flow and inventory investment
- 3FloWorks integration, acquired revenue and total debt
Next check: November 9, 2026 Q3 results: first reported period after FloWorks closed; check integration costs, financing and demand by end market.
Sources: company filings and dated sources collected for Find My Moat; market cap as of Oct 6, 2026. Not investment advice.
Free to reuse, commercially too, with a credit link. See the data license.
Moat Score 81/100 by <a href="https://www.findmymoat.com/stocks/XNYS:FERG">Find My Moat</a> (as of September 2026)Request update
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