MSC Industrial Direct (MSM) and MRC Global (MRC) Head to Head Comparison

MSC Industrial Direct (NYSE: MSM) and MRC Global (NYSE:MRC) are both industrial products companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.

Insider and Institutional Ownership

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75.3% of MSC Industrial Direct shares are owned by institutional investors. Comparatively, 98.4% of MRC Global shares are owned by institutional investors. 31.4% of MSC Industrial Direct shares are owned by company insiders. Comparatively, 7.0% of MRC Global shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares MSC Industrial Direct and MRC Global’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MSC Industrial Direct $2.89 billion 1.75 $231.43 million $4.05 22.05
MRC Global $3.65 billion 0.47 $50.00 million $0.03 624.00

MSC Industrial Direct has higher earnings, but lower revenue than MRC Global. MSC Industrial Direct is trading at a lower price-to-earnings ratio than MRC Global, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

MSC Industrial Direct has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, MRC Global has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500.

Profitability

This table compares MSC Industrial Direct and MRC Global’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MSC Industrial Direct 9.91% 20.53% 12.32%
MRC Global 1.37% 3.54% 1.18%

Dividends

MSC Industrial Direct pays an annual dividend of $2.32 per share and has a dividend yield of 2.6%. MRC Global does not pay a dividend. MSC Industrial Direct pays out 57.3% of its earnings in the form of a dividend. MSC Industrial Direct has increased its dividend for 7 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for MSC Industrial Direct and MRC Global, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MSC Industrial Direct 0 9 6 0 2.40
MRC Global 0 3 8 0 2.73

MSC Industrial Direct currently has a consensus price target of $100.50, indicating a potential upside of 12.54%. MRC Global has a consensus price target of $20.44, indicating a potential upside of 9.21%. Given MSC Industrial Direct’s higher possible upside, equities research analysts plainly believe MSC Industrial Direct is more favorable than MRC Global.

Summary

MSC Industrial Direct beats MRC Global on 10 of the 17 factors compared between the two stocks.

MSC Industrial Direct Company Profile

MSC Industrial Direct Co., Inc., together with its subsidiaries, distributes various ranges of metalworking and maintenance, repair, and operations (MRO) products primarily in the United States, Canada, and the United Kingdom. The company's MRO products comprise cutting tools, measuring instruments, tooling components, metalworking products, fasteners, flat stock, raw materials, abrasives, machinery hand and power tools, safety and janitorial supplies, plumbing supplies, materials handling products, power transmission components, and electrical supplies. It offers approximately 1,565,000 stock-keeping units through its catalogs; brochures; eCommerce channels, including its Website, mscdirect.com; and call-centers and branches. The company serves primarily through its distribution network of 93 branch offices and 12 customer fulfillment centers. It serves individual machine shops, manufacturing companies, and government agencies. The company was founded in 1941 and is headquartered in Melville, New York.

MRC Global Company Profile

MRC Global Inc., through its subsidiaries, distributes pipes, valves, fittings, and related products and services to the energy industry in the United States, Canada, and internationally. The company supplies products across various markets, such as upstream, midstream, and downstream. It offers ball, butterfly, gate, globe, check, diaphragm, needle, and plug valves; and other products, such as lined corrosion resistant piping systems, control valves, valve automation products, and top work components, as well as measurement, steam, and instrumentation products. The company also provides carbon steel fittings and flanges, including carbon weld fittings, flanges, and piping components; stainless, alloy, and corrosion resistant pipes, tubing, fittings, and flanges; and carbon line pipes. In addition, it offers natural gas distribution products comprising risers, meters, polyethylene pipes and fittings, and various other components and industrial supplies; oilfield and industrial supplies and completion equipment consisting of high density polyethylene pipes, fittings, and rods; and specialized production equipment comprising tanks and separators. Further, the company provides various services, such as product testing, manufacturer assessments, multiple daily deliveries, volume purchasing, inventory and zone store management and warehousing, technical support, training, just-in-time delivery, truck stocking, order consolidation, product tagging, and system interfaces. Its products are used in the construction, maintenance, repair, and overhaul of equipment used in extreme operating conditions, including high pressure, high/low temperature, and high corrosive and abrasive environments. The company was formerly known as McJunkin Red Man Holding Corporation and changed its name to MRC Global Inc. in January 2012. MRC Global Inc. was founded in 1921 and is headquartered in Houston, Texas.

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