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How Ferguson’s Dividend Hike and Moore Supply Deal Will Impact Ferguson Enterprises (FERG) Investors

Simply Wall St·02/06/2026 09:16:10
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  • In January 2026, Ferguson Enterprises reported that it continued to execute its growth strategy in a difficult market, delivering higher sales, expanding gross margin, raising its quarterly dividend, and completing the acquisition of Chicago-area HVAC distributor Moore Supply Company.
  • This combination of dividend growth and a targeted HVAC acquisition underlines how Ferguson is using both cash returns and bolt-on deals to support its long-term business positioning.
  • Next, we’ll examine how the Moore Supply acquisition shapes Ferguson’s investment narrative and what it might mean for future growth.

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What Is Ferguson Enterprises' Investment Narrative?

For Ferguson, the core investment case still hinges on a resilient distribution model, strong returns on equity and disciplined capital allocation, rather than any single quarter. The January update, with mid single digit sales growth, better gross margins, a higher quarterly dividend and the Moore Supply acquisition, broadly reinforces the existing short term catalysts: continued pricing and mix discipline, steady earnings growth and ongoing buybacks. The Moore Supply deal looks like a classic bolt on that should modestly deepen Ferguson’s HVAC footprint rather than transform the business, so its immediate financial impact is unlikely to be large. Where it does matter is on the risk side: layering acquisitions and higher shareholder returns on top of already high debt tightens the margin for error if conditions turn.

However, one key balance sheet risk here is easy to overlook and investors should be aware of it. Despite retreating, Ferguson Enterprises' shares might still be trading 7% above their fair value. Discover the potential downside here.

Exploring Other Perspectives

FERG 1-Year Stock Price Chart
FERG 1-Year Stock Price Chart

The Simply Wall St Community’s four fair value estimates span roughly US$224.90 to US$275.26, showing how far apart individual views can be. Against that backdrop, Ferguson’s mix of steady earnings growth, active buybacks and higher dividends, alongside a higher debt load, gives you plenty of moving parts to weigh when thinking about how the business might perform from here.

Explore 4 other fair value estimates on Ferguson Enterprises - why the stock might be worth as much as 8% more than the current price!

Build Your Own Ferguson Enterprises Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.