We came across a bullish thesis on Ferguson Enterprises Inc. on Quality Value Investing’s Substack by David J. Waldron. In this article, we will summarize the bulls’ thesis on FERG. Ferguson Enterprises Inc.’s share was trading at $251.54 as of December 1st. FERG’s trailing and forward P/E were 26.99 and 22.62 respectively according to Yahoo Finance.
Plumbing equipment
Ferguson Enterprises, Inc. (NYSE: FERG) remains a strong holding in QVI Real-Time Stock Picks’ industrials sector portfolio, meeting Quality Value Investing’s standards for business quality and valuation. The company, the largest plumbing and HVAC distributor in North America, has demonstrated durable market leadership across plumbing, water infrastructure, and HVAC products, earning a narrow moat rating from Morningstar.
Following its 2024 reorganization and relocation of its headquarters to the U.S., Ferguson has continued to strengthen its operating profile while returning significant capital to shareholders through dividends and buybacks, including a $4.0 billion repurchase program with over 30 million shares retired as of September 2025.
The company’s five-year annualized revenue growth has been in the high single digits, trailing the S&P 500 but reflecting resilience across cyclical markets. Despite low gross margins due to its distribution-heavy model, Ferguson has maintained healthy mid-single-digit net margins and robust returns on equity—twice QVI’s target—and returns on invested capital above its cost of capital, underscoring disciplined capital allocation. Owners’ earnings growth, combining EPS and dividend growth, achieved double-digit annualized rates, highlighting consistent shareholder value creation.
Although its recent revenue growth of 3.8% lagged the broader market, Ferguson’s financial strength, cash generation, and leadership position continue to support a bullish outlook. The company’s fundamentals remain solid, with effective management execution and sustainable profitability. With its steady cash returns, sound balance sheet, and entrenched competitive positioning, Ferguson Enterprises represents a quality compounder that aligns well with QVI’s long-term investment framework.
Previously we covered a bullish thesis on Pool Corporation (POOL) by Douglas Ott in May 2025, which highlighted the company’s resilience in non-discretionary maintenance products despite weakness in new pool construction. The company’s stock price has depreciated approximately by 16.46% since our coverage. This is because the thesis hasn’t played out well. David J. Waldron shares a similar but emphasizes on Ferguson’s scale-driven stability in essential infrastructure distribution.
