MSC INDUSTRIAL DIRECT CO-A (MSM) Stock Fundamental Analysis
NYSE:MSM - New York Stock Exchange, Inc. - US5535301064 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to MSM. MSM was compared to 49 industry peers in the Trading Companies & Distributors industry. MSM has an excellent profitability rating, but there are some minor concerns on its financial health. MSM has a expensive valuation and it also scores bad on growth. MSM also has an excellent dividend rating. These ratings would make MSM suitable for dividend investing!
1. Profitability
1.1 Basic Checks
In the past year MSM was profitable.
MSM had a positive operating cash flow in the past year.
In the past 5 years MSM has always been profitable.
MSM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of MSM (8.66%) is better than 73.47% of its industry peers.
Looking at the Return On Equity, with a value of 15.73%, MSM is in the better half of the industry, outperforming 65.31% of the companies in the same industry.
MSM has a better Return On Invested Capital (14.01%) than 83.67% of its industry peers.
MSM had an Average Return On Invested Capital over the past 3 years of 17.86%. This is significantly above the industry average of 9.77%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.66% | ||
| ROE | 15.73% | ||
| ROIC | 14.01% |
ROA(3y)12.15%
ROA(5y)11.16%
ROE(3y)22.31%
ROE(5y)20.98%
ROIC(3y)17.86%
ROIC(5y)16.13%
1.3 Margins
Looking at the Profit Margin, with a value of 5.69%, MSM is in the better half of the industry, outperforming 69.39% of the companies in the same industry.
In the last couple of years the Profit Margin of MSM has declined.
MSM has a better Operating Margin (9.17%) than 65.31% of its industry peers.
MSM's Operating Margin has declined in the last couple of years.
With a decent Gross Margin value of 40.90%, MSM is doing good in the industry, outperforming 75.51% of the companies in the same industry.
MSM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.17% | ||
| PM (TTM) | 5.69% | ||
| GM | 40.9% |
OM growth 3Y0.54%
OM growth 5Y-2.24%
PM growth 3Y0.4%
PM growth 5Y-4.64%
GM growth 3Y0.04%
GM growth 5Y-0.67%
2. Health
2.1 Basic Checks
MSM has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for MSM has been increased compared to 1 year ago.
Compared to 5 years ago, MSM has more shares outstanding
The debt/assets ratio for MSM is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 4.95 indicates that MSM is not in any danger for bankruptcy at the moment.
MSM has a better Altman-Z score (4.95) than 77.55% of its industry peers.
The Debt to FCF ratio of MSM is 1.79, which is an excellent value as it means it would take MSM, only 1.79 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 1.79, MSM is doing good in the industry, outperforming 73.47% of the companies in the same industry.
MSM has a Debt/Equity ratio of 0.22. This is a healthy value indicating a solid balance between debt and equity.
MSM's Debt to Equity ratio of 0.22 is fine compared to the rest of the industry. MSM outperforms 63.27% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 1.79 | ||
| Altman-Z | 4.95 |
ROIC/WACC1.41
WACC9.95%
2.3 Liquidity
MSM has a Current Ratio of 1.92. This is a normal value and indicates that MSM is financially healthy and should not expect problems in meeting its short term obligations.
MSM has a Current ratio (1.92) which is comparable to the rest of the industry.
A Quick Ratio of 0.88 indicates that MSM may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.88, MSM is doing worse than 69.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.92 | ||
| Quick Ratio | 0.88 |
3. Growth
3.1 Past
MSM shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -32.19%.
MSM shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -2.08% yearly.
The Revenue has decreased by -5.71% in the past year.
The Revenue has been growing slightly by 2.58% on average over the past years.
EPS 1Y (TTM)-32.19%
EPS 3Y-0.14%
EPS 5Y-2.08%
EPS Q2Q%-38.98%
Revenue 1Y (TTM)-5.71%
Revenue growth 3Y5.62%
Revenue growth 5Y2.58%
Sales Q2Q%-4.66%
3.2 Future
Based on estimates for the next years, MSM will show a small growth in Earnings Per Share. The EPS will grow by 6.70% on average per year.
Based on estimates for the next years, MSM will show a small growth in Revenue. The Revenue will grow by 3.21% on average per year.
EPS Next Y-25.65%
EPS Next 2Y-9.07%
EPS Next 3Y-0.58%
EPS Next 5Y6.7%
Revenue Next Year-2.43%
Revenue Next 2Y0.57%
Revenue Next 3Y2.11%
Revenue Next 5Y3.21%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 20.56 indicates a rather expensive valuation of MSM.
Compared to the rest of the industry, the Price/Earnings ratio of MSM is on the same level as its industry peers.
MSM is valuated rather cheaply when we compare the Price/Earnings ratio to 26.31, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 20.45 indicates a rather expensive valuation of MSM.
The rest of the industry has a similar Price/Forward Earnings ratio as MSM.
MSM's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.13.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.56 | ||
| Fwd PE | 20.45 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as MSM.
MSM's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. MSM is cheaper than 77.55% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.97 | ||
| EV/EBITDA | 11.68 |
4.3 Compensation for Growth
The decent profitability rating of MSM may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-9.07%
EPS Next 3Y-0.58%
5. Dividend
5.1 Amount
MSM has a Yearly Dividend Yield of 4.15%, which is a nice return.
Compared to an average industry Dividend Yield of 2.39, MSM pays a better dividend. On top of this MSM pays more dividend than 95.92% of the companies listed in the same industry.
MSM's Dividend Yield is rather good when compared to the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.15% |
5.2 History
The dividend of MSM has a limited annual growth rate of 5.09%.
MSM has paid a dividend for at least 10 years, which is a reliable track record.
MSM has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)5.09%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
88.24% of the earnings are spent on dividend by MSM. This is not a sustainable payout ratio.
The dividend of MSM is growing, but earnings are growing more, so the dividend growth is sustainable.
DP88.24%
EPS Next 2Y-9.07%
EPS Next 3Y-0.58%
81.01
-0.97 (-1.18%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners89%
Inst Owner Change2.26%
Ins Owners20.29%
Ins Owner Change3.45%
Market Cap4.51B
Analysts70
Price Target82.62 (1.99%)
Short Float %6.72%
Short Ratio4.92
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.15% |
Yearly Dividend3.36
Dividend Growth(5Y)5.09%
DP88.24%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.65%
Min EPS beat(2)4.54%
Max EPS beat(2)16.76%
EPS beat(4)2
Avg EPS beat(4)3.7%
Min EPS beat(4)-5.6%
Max EPS beat(4)16.76%
EPS beat(8)4
Avg EPS beat(8)1.1%
EPS beat(12)7
Avg EPS beat(12)1.61%
EPS beat(16)10
Avg EPS beat(16)1.82%
Revenue beat(2)1
Avg Revenue beat(2)-0.11%
Min Revenue beat(2)-1.85%
Max Revenue beat(2)1.62%
Revenue beat(4)1
Avg Revenue beat(4)-0.74%
Min Revenue beat(4)-1.85%
Max Revenue beat(4)1.62%
Revenue beat(8)3
Avg Revenue beat(8)-0.44%
Revenue beat(12)6
Avg Revenue beat(12)-0.19%
Revenue beat(16)8
Avg Revenue beat(16)-0.18%
PT rev (1m)1.67%
PT rev (3m)-3.95%
EPS NQ rev (1m)0.26%
EPS NQ rev (3m)-1.43%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.19%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.91%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)-0.71%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.56 | ||
| Fwd PE | 20.45 | ||
| P/S | 1.2 | ||
| P/FCF | 14.97 | ||
| P/OCF | 11.09 | ||
| P/B | 3.33 | ||
| P/tB | 8.33 | ||
| EV/EBITDA | 11.68 |
EPS(TTM)3.94
EY4.86%
EPS(NY)3.96
Fwd EY4.89%
FCF(TTM)5.41
FCFY6.68%
OCF(TTM)7.31
OCFY9.02%
SpS67.33
BVpS24.34
TBVpS9.72
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.66% | ||
| ROE | 15.73% | ||
| ROCE | 18.7% | ||
| ROIC | 14.01% | ||
| ROICexc | 14.34% | ||
| ROICexgc | 26.21% | ||
| OM | 9.17% | ||
| PM (TTM) | 5.69% | ||
| GM | 40.9% | ||
| FCFM | 8.04% |
ROA(3y)12.15%
ROA(5y)11.16%
ROE(3y)22.31%
ROE(5y)20.98%
ROIC(3y)17.86%
ROIC(5y)16.13%
ROICexc(3y)18.26%
ROICexc(5y)16.62%
ROICexgc(3y)32.65%
ROICexgc(5y)29.44%
ROCE(3y)23.83%
ROCE(5y)21.53%
ROICexcg growth 3Y8.36%
ROICexcg growth 5Y0.99%
ROICexc growth 3Y6.81%
ROICexc growth 5Y0.34%
OM growth 3Y0.54%
OM growth 5Y-2.24%
PM growth 3Y0.4%
PM growth 5Y-4.64%
GM growth 3Y0.04%
GM growth 5Y-0.67%
F-Score4
Asset Turnover1.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 1.79 | ||
| Debt/EBITDA | 0.71 | ||
| Cap/Depr | 123.94% | ||
| Cap/Sales | 2.81% | ||
| Interest Coverage | 13.77 | ||
| Cash Conversion | 94.87% | ||
| Profit Quality | 141.35% | ||
| Current Ratio | 1.92 | ||
| Quick Ratio | 0.88 | ||
| Altman-Z | 4.95 |
F-Score4
WACC9.95%
ROIC/WACC1.41
Cap/Depr(3y)111.09%
Cap/Depr(5y)95.87%
Cap/Sales(3y)2.19%
Cap/Sales(5y)1.94%
Profit Quality(3y)117.22%
Profit Quality(5y)113.93%
High Growth Momentum
Growth
EPS 1Y (TTM)-32.19%
EPS 3Y-0.14%
EPS 5Y-2.08%
EPS Q2Q%-38.98%
EPS Next Y-25.65%
EPS Next 2Y-9.07%
EPS Next 3Y-0.58%
EPS Next 5Y6.7%
Revenue 1Y (TTM)-5.71%
Revenue growth 3Y5.62%
Revenue growth 5Y2.58%
Sales Q2Q%-4.66%
Revenue Next Year-2.43%
Revenue Next 2Y0.57%
Revenue Next 3Y2.11%
Revenue Next 5Y3.21%
EBIT growth 1Y-24.87%
EBIT growth 3Y6.19%
EBIT growth 5Y0.29%
EBIT Next Year-3.64%
EBIT Next 3Y5.51%
EBIT Next 5Y7.1%
FCF growth 1Y-43.57%
FCF growth 3Y22.15%
FCF growth 5Y2.39%
OCF growth 1Y-32.73%
OCF growth 3Y22.3%
OCF growth 5Y4.57%