Reliance (NYSE:RS) and W.W. Grainger (NYSE:GWW) Head-To-Head Review

Reliance (NYSE:RS) and W.W. Grainger (NYSE:GWW) are both large-cap industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of recent ratings and target prices for Reliance and W.W. Grainger, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Reliance	1	5	2	1	2.33
W.W. Grainger	1	7	2	0	2.10

Reliance presently has a consensus price target of $380.33, indicating a potential downside of 5.24%. W.W. Grainger has a consensus price target of $1,285.00, indicating a potential upside of 0.70%. Given W.W. Grainger’s higher possible upside, analysts clearly believe W.W. Grainger is more favorable than Reliance.

Insider and Institutional Ownership

79.3% of Reliance shares are owned by institutional investors. Comparatively, 80.7% of W.W. Grainger shares are owned by institutional investors. 0.4% of Reliance shares are owned by company insiders. Comparatively, 6.3% of W.W. Grainger shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Reliance has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, W.W. Grainger has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Valuation and Earnings

This table compares Reliance and W.W. Grainger”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reliance	$14.29 billion	1.43	$739.40 million	$17.20	23.34
W.W. Grainger	$17.94 billion	3.35	$1.71 billion	$39.22	32.54

W.W. Grainger has higher revenue and earnings than Reliance. Reliance is trading at a lower price-to-earnings ratio than W.W. Grainger, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Reliance and W.W. Grainger’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Reliance	5.65%	12.51%	8.47%
W.W. Grainger	9.92%	48.73%	22.40%

Dividends

Reliance pays an annual dividend of $5.00 per share and has a dividend yield of 1.2%. W.W. Grainger pays an annual dividend of $9.96 per share and has a dividend yield of 0.8%. Reliance pays out 29.1% of its earnings in the form of a dividend. W.W. Grainger pays out 25.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Reliance has raised its dividend for 15 consecutive years and W.W. Grainger has raised its dividend for 55 consecutive years.

Summary

W.W. Grainger beats Reliance on 14 of the 17 factors compared between the two stocks.

About Reliance

Reliance, Inc. operates as a diversified metal solutions provider and the metals service center company in the United States, Canada, and internationally. The company distributes a line of approximately 100,000 metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium, and specialty steel products; and provides metals processing services to general manufacturing, non-residential construction, transportation, aerospace, energy, electronics and semiconductor fabrication, and heavy industries. It sells its products directly to original equipment manufacturers, which primarily include small machine shops and fabricators. The company was formerly known as Reliance Steel & Aluminum Co. and changed its name to Reliance, Inc. in February 2024. Reliance, Inc. was founded in 1939 and is based in Scottsdale, Arizona.

About W.W. Grainger

W.W. Grainger, Inc., together with its subsidiaries, distributes maintenance, repair, and operating products and services primarily in North America, Japan, the United Kingdom, and internationally. The company operates through two segments, High-Touch Solutions N.A. and Endless Assortment. The company provides safety, security, material handling and storage equipment, pumps and plumbing equipment, cleaning and maintenance, and metalworking and hand tools. It also offers technical support and inventory management services. The company serves smaller businesses to large corporations, government entities, and other institutions, as well as commercial, healthcare, and manufacturing industries through sales and service representatives, and electronic and ecommerce channels. W.W. Grainger, Inc. was founded in 1927 and is headquartered in Lake Forest, Illinois.