Ferguson Enterprises (NYSE: FERG)
Quality Value Investing Research Report | $FERG Updated Coverage | October 2025
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In this updated coverage research report, we’ll reexamine the QVI Real-Time Stock Picks industrials sector holding, Ferguson Enterprises FERG 0.00%↑, to see if it continues to meet Quality Value Investing’s criteria based on our checklist analysis of the business’s current wealth and the share price’s present value.
Ferguson Enterprises | Company Current Wealth
Value Proposition
Ferguson Enterprises is a dividend-paying large-cap stock in the industrials sector’s trading companies & distributors industry. It was added to the QVI Real-Time Stock Picks on August 2, 2023, at a $154.98 cost basis per share, adjusted for dividends paid to cash.
Ferguson Enterprises Inc. (NYSE: FERG) supplies plumbing, heating, ventilating, and air conditioning products across the United States and Canada. Founded in 1953, the company is based in Newport News, Virginia, USA.
On August 1, 2024, as part of a corporate reorganization, the company, previously known as Ferguson plc, established Ferguson Enterprises, Inc. as the new parent company and relocated its headquarters from Great Britain to the United States.
Economic Moat
Morningstar gives Ferguson a narrow moat rating because it views North America’s largest industrial and construction distributor as a leading player in many of its end markets, especially in plumbing, water infrastructure, and heating, ventilation, and air conditioning products.
QVI’s Value Proposition Elevator Pitch for FERG
Ferguson is the largest plumbing and HVAC distributor in North America. Its stock price has an enduring track record of outperforming its industry peers and the broader market.
QVI’s value proposition rating for Ferguson Enterprises: Bullish.
Returns on Management
Revenue Growth and Profit Margins
According to the checklist table below, Ferguson Enterprises’ trailing five-year annualized revenue growth was high-single-digit positive, underperforming the S&P 500 topline growth of 15.6%. Additionally, the company’s revenue growth of +3.8% lagged the broader market’s 18.0% for the most recent twelve months.
Further down the income statement, Ferguson reported a positive mid-single-digit net profit margin. This outcome was driven by a low gross margin, resulting from a high cost of goods sold, as it underperformed the S&P 500’s net margin of 22.8% with a gross margin of 54.6%.
Returns on Equity and Invested Capital
Ferguson’s senior management achieved a return on equity, or ROE, that was twice QVI’s targeted threshold but fell short of the S&P 500’s ROE of 49.1%.
Stock buyback programs often boost ROE. For example, the company has an extensive $4.0 billion share repurchase program and had repurchased 30.87 million shares by September 2025.
Ferguson’s return on invested capital, or ROIC, exceeded QVI’s threshold but fell short of the broader market’s 25.1% return. Additionally, the company’s ROIC surpassed its weighted average cost of capital, or WACC, indicating that its senior executives are effective at capital allocation.
Owners’ Earnings
In a further test of management effectiveness, the five-year trailing total return of owners’ earnings—calculated as EPS growth plus dividend rate growth annualized—was in double digits, representing an excellent rate of return for stockholders.
When substituting its 12.1% free cash flow growth for EPS growth, the five-year owners’ earnings are lower, yet still respectable, at 16.3%.
QVI’s business fundamentals rating for Ferguson Enterprises: Bullish.
Next, we’ll examine the company’s enterprise downsize risks, the present value of the stock price, share price downside risks, and the investment thesis, each exclusive to Quality Value Investing’s premium (paying) subscribers.
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Unless noted, all data presented is sourced from Charles Schwab & Co., Ferguson Enterprises, Inc., Google Finance, GuruFocus, and Yahoo Finance as of the market close on October 22, 2025, and is intended for illustration purposes only.
Disclosure: As of the date of this research report, I/we hold no beneficial positions in FERG common shares in our family portfolio. I wrote this report myself, and it expresses my own opinions. I am not receiving compensation for it other than from Substack paid subscriptions. I have no business relationship with any company whose stock is mentioned in this post.
Additional Disclosure: Quality Value Investing by David J. Waldron’s primary ticker research reports are for informational purposes only. The accuracy of the data cannot be guaranteed. Narrative and analytics are impersonal, meaning they are not tailored to individual needs or intended for portfolio construction beyond The QVI Real-Time Stock Picks, which is presented solely for educational purposes. David is a private investor and author, not an investment adviser. Readers should always engage in independent research or due diligence and, as appropriate, consider consulting a fee-only certified financial planner, a licensed discount broker/dealer, a flat fee registered investment adviser, a certified public accountant, or a specialized attorney before making any investment, income tax, or estate planning decisions.
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