Buffett Brain · Research note
Score updated 26 Sept 2026 · analysis from 27 Jul 2026
FAST· Industrials
Fastenal
Fastenal's high ROIC of 28.8% reflects strong profitability, but its valuation multiples signal a significant overvaluation risk.
Buffett fit
Strong fit
Owner
77
Durability
86
Management
78
Price
2
Score updated 26 Sept 2026 · analysis from 27 Jul 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Industrials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned 100% of Fastenal, I would focus on maintaining its strong of 28.8% while being cautious about the high ratio of 38.4.
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Fastenal has shown resilience with a 5-year EPS CAGR of 8.29% and profitability in all five years.
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Management has maintained a relatively stable share count, with a 5-year CAGR of -0.04%, indicating a disciplined approach to .
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The current yield of 2.1% is far below my target of 8-10%, indicating a significant issue.
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- What would change the call
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of 28.8% significantly exceeds the sector top-quintile cutoff of 13.6%.
- 2 of 44.9% is above the sector top-quintile cutoff of 43.4%.
- 3 of 20.2% ranks in the top quintile compared to the sector's 17.8%.
- 4Current ratio of 4.39 indicates strong short-term financial health.
Concerns
5- 1 ratio of 38.4 is substantially higher than the target P/E of 20, indicating overvaluation.
- 2 yield of 2.1% falls far below the desired 8-10% range.
- 3 yield of only 0.1% shows limited commitment to returning capital to shareholders.
- 4Dividend CAGR of -15.59% raises concerns about management's prioritization of shareholder returns.
Price history
$52.47+83.8%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Fastenal operates a wholesale distribution network for industrial supplies, generating $8.2B in revenue with a net income of $1.26B. Its diverse customer base includes manufacturers, contractors, and government entities. The company’s fasteners and related products are essential for various industries, ensuring steady demand. With a of 44.9%, the unit economics appear solid.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 26, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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