CNBC Television · Sep 28, 2026
With Mark Sheahan, CEO of Graco
Graco's free cash flow has doubled over the last five years, Mark Sheahan said, and its stock has not.
Investors hunting for data center plays have bid up component makers like Lumentum, the host said, while Graco, whose equipment paints, coats and fireproofs the buildings those data centers sit in, trades well below Wall Street's average price target. Sheahan's answer was that data centers are one market among many for Graco, and that the company is not chasing the trade.
"We just keep doing what we do really well and that's worked for us."
Mark Sheahan, CEO of Graco, on CNBC Television, ran the company's finances as its CFO for three years before taking over as chief executive in June 2021, and runs a 100-year-old manufacturer that he said has paid out more than $1B in dividends and buybacks in 18 months.
The full segment is covered here so you can skip it.
Here are the 4 insights that matter.
Key Takeaways
Graco sells into nearly every stage of a data center build, from exterior paint to fireproofing on the steel girders
Free cash flow has doubled in five years while the stock has not, and Sheahan says he is content not to be "the shiny object"
Data centers are not the main thrust of the business
Graco also makes high-purity pumps sold to Lam Research and Applied Materials for chip-making machines
More than $1B returned in 18 months through dividends and buybacks, on a market value Sheahan put at $12B
1. Graco's Place in AI Builds
The host opened by noting that Graco, ticker GGG, is not the baby stroller company, and asked Sheahan to explain in plain English where it sits in American industry.
Every new data center is a construction job for Graco's customers
"Yeah, we're at the center of it because a lot of this build-out that's happening, AI data centers, they have to build buildings, right?" — Mark Sheahan
Sheahan walked through a building going up. Graco's customers use its equipment to paint the outside and then the inside, to put coating materials on the floors, to lay roofing and to paint the line stripes in the parking lots.
Fireproofing on the steel frame
Graco makes the equipment that sprays intumescent fireproofing, a coating that swells in heat, onto the girders that hold a building up.
"So, it gives people inside of the building more time to get out if the girders are coated with intumescent coating, so we're there as well." — Mark Sheahan
The host called the business boring but necessary, the stuff that makes the world work.
