Contrasting MSC Industrial Direct (MSM) & Its Peers

MSC Industrial Direct (NYSE:MSM) is one of 157 publicly-traded companies in the “Trading Companies & Distributors” industry, but how does it weigh in compared to its competitors? We will compare MSC Industrial Direct to related businesses based on the strength of its institutional ownership, analyst recommendations, profitability, dividends, earnings, valuation and risk.

Analyst Recommendations

This is a summary of recent recommendations for MSC Industrial Direct and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MSC Industrial Direct	0	2	7	1	2.90
MSC Industrial Direct Competitors	1469	4921	6741	242	2.43

MSC Industrial Direct currently has a consensus target price of $133.22, suggesting a potential upside of 10.10%. As a group, “Trading Companies & Distributors” companies have a potential upside of 8.00%. Given MSC Industrial Direct’s stronger consensus rating and higher possible upside, equities research analysts clearly believe MSC Industrial Direct is more favorable than its competitors.

Volatility and Risk

MSC Industrial Direct has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, MSC Industrial Direct’s competitors have a beta of 1.32, suggesting that their average stock price is 32% more volatile than the S&P 500.

Valuation and Earnings

This table compares MSC Industrial Direct and its competitors revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
MSC Industrial Direct	$4.01 billion	$222.59 million	30.40
MSC Industrial Direct Competitors	$6.67 billion	$363.16 million	33.57

MSC Industrial Direct’s competitors have higher revenue and earnings than MSC Industrial Direct. MSC Industrial Direct is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Dividends

MSC Industrial Direct pays an annual dividend of $3.56 per share and has a dividend yield of 2.9%. MSC Industrial Direct pays out 89.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Trading Companies & Distributors” companies pay a dividend yield of 2.6% and pay out 34.7% of their earnings in the form of a dividend. MSC Industrial Direct has raised its dividend for 3 consecutive years.

Profitability

This table compares MSC Industrial Direct and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MSC Industrial Direct	5.55%	18.72%	10.57%
MSC Industrial Direct Competitors	1.10%	-33.71%	3.55%

Institutional & Insider Ownership

79.3% of MSC Industrial Direct shares are owned by institutional investors. Comparatively, 50.5% of shares of all “Trading Companies & Distributors” companies are owned by institutional investors. 19.0% of MSC Industrial Direct shares are owned by company insiders. Comparatively, 17.3% of shares of all “Trading Companies & Distributors” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

MSC Industrial Direct beats its competitors on 10 of the 15 factors compared.

MSC Industrial Direct Company Profile

MSC Industrial Direct is a North American distributor of metalworking products and maintenance, repair and operations (MRO) supplies. The company serves manufacturers and other industrial customers, offering products such as cutting tools, abrasives, hand tools, safety equipment, fasteners and electrical supplies. In addition to product distribution, MSC provides services designed to help customers manage purchasing and inventory. These include online ordering, inventory-management programs, vending solutions and technical support for metalworking and manufacturing applications.