Shares of Ferguson Enterprises (FERG 7.89%) rose as much as 9.8% on Tuesday, following the release of mixed results for the fourth quarter of fiscal 2025, ended July 31. The distributor of plumbing and heating supplies erased negative sentiment from last week’s dividend announcement. All told, Ferguson’s stock is back where it was a month ago.

Earnings, revenue, and dividend support

Ferguson’s Q4 revenue rose 6.9% year over year, landing at $8.5 billion. Adjusted bottom-line earnings jumped from $2.98 to $3.48 per share — a 17% increase. The analyst community had expected earnings near $3.29 per share on sales in the neighborhood of $8.7 billion.

At the same time, management issued mildly bullish guidance for the just-started fiscal year 2026. Adjusted operating margins should widen and Ferguson’s single-digit revenue growth is slated to continue.

The confident presentation also reassured investors who were concerned about Ferguson’s future dividends. Last week’s dividend announcement included warnings about the difficulty of moving money across international borders in this macroeconomic era, potentially slowing down dividend payouts. Today’s earnings release and conference call didn’t give much weight to those cash-moving issues, though. All seems forgiven.

Image source: Getty Images.

Beyond the Q4 numbers

It should be noted that Ferguson is a multinational company, stemming from the 2024 merger of a British and an American business. Still, essentially all of Ferguson’s sales come from North America. I wouldn’t worry too much about Ferguson supporting its largely American dividend checks with funds from British banks — the whole operation has effectively moved west.

As for the actual business, Ferguson is doing fine. The company benefits from tighter air conditioning standards in the U.S. market, which outweighed milder demand for residential home improvement products in the fourth quarter. Other headwinds included a slowing new construction market and uncertain long-term macroeconomic trends.

At the same time, Ferguson is preparing for better times. The company completed nine acquisitions in this fiscal year and another one after the period closed on July 31. It is also making the most of its human capital, cross-training plumbers and air conditioning contractors to handle both types of work.

The stock isn’t exactly cheap at 25 times trailing earnings, given the single-digit top-line growth. The richer profit margins and ambitious growth-boosting acquisitions could make Ferguson an interesting stock to own in the long run, though.