WDFC - WD-40 Company: Fantastic Business That Is Incredibly Expensive
2024-04-18 08:20:29 ET
Summary
- WD-40 has achieved healthy growth during the last decade (CAGR: +4%), owing to its uniquely positioned brand, product innovation, and economic development globally.
- The company has been quietly expanding its product offering, which has the potential to drive revenue growth beyond the ~5% mark.
- WD-40’s Management has delivered impressively and is currently delivering a strong, multifaceted strategy that has the potential to drive margin and revenue growth.
- The company is significantly outperforming its peers, with its asset-light model allowing for an unheard-of ROE of ~33%.
- WD-40’s valuation is far too high, trading at an NTM EBITDA multiple of 30x and a FCF yield of 1.6%, leaving limited upside for new investors.
Introduction and thesis
WD-40 Company ( WDFC ) is a global consumer products company known for its iconic WD-40 Multi-Use Product, as well as a range of household maintenance and cleaning products. The company was founded in 1953 and is headquartered in San Diego, California.
WD-40 is a fantastic business that is managed impeccably. Its unrivaled brand is utilized to its maximum to generate leading margins, without underinvestment in R&D. Products launched under its “WD-40 Specialist” segment are outgrowing the wider business and are primed to have a larger impact on the top-line going forward....
WD-40 Company: Fantastic Business That Is Incredibly Expensive