FERGY - Ferguson Delivers A Better Quarter And Relatively Bullish Commentary

• Ferguson's fourth-quarter revenue was basically in line with prior guidance, but earnings were notably better, with mid-single digit overall growth and low-double digit growth in the U.S.
• Both the U.S. and Canadian businesses have returned to organic revenue growth, and Ferguson continues to take share in the residential and commercial markets.
• While parts of the commercial market are weakening, the residential market remains healthy looking into 2021.
• Ferguson surprised with a dividend announcement basically restoring the interim dividend, and announced it's ready to get back to M&A.
• Although the company doesn't offer huge upside on a DCF basis, I see some upside as Ferguson closes the valuation gap with other quality distributors.

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