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 48 industry peers in the Trading Companies & Distributors industry. While MSM has a great profitability rating, there are some minor concerns on its financial health. MSM is valied quite expensively at the moment, while it does show a decent growth rate. Finally MSM also has an excellent dividend rating. This makes MSM very considerable 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.
Each year in the past 5 years MSM had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.66%, MSM is in the better half of the industry, outperforming 72.92% of the companies in the same industry.
MSM has a better Return On Equity (15.73%) than 62.50% of its industry peers.
With an excellent Return On Invested Capital value of 14.01%, MSM belongs to the best of the industry, outperforming 85.42% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for MSM is significantly above the industry average of 9.18%.
| 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
MSM has a better Profit Margin (5.69%) than 66.67% of its industry peers.
In the last couple of years the Profit Margin of MSM has declined.
MSM has a Operating Margin of 9.17%. This is in the better half of the industry: MSM outperforms 64.58% of its industry peers.
In the last couple of years the Operating Margin of MSM has declined.
MSM has a Gross Margin of 40.90%. This is in the better half of the industry: MSM outperforms 75.00% of its industry peers.
In the last couple of years the Gross Margin of MSM has remained more or less at the same level.
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MSM is creating value.
Compared to 1 year ago, MSM has more shares outstanding
The number of shares outstanding for MSM has been increased compared to 5 years ago.
MSM has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.98 indicates that MSM is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 4.98, MSM is doing good in the industry, outperforming 79.17% of the companies in the same industry.
MSM has a debt to FCF ratio of 1.79. This is a very positive value and a sign of high solvency as it would only need 1.79 years to pay back of all of its debts.
The Debt to FCF ratio of MSM (1.79) is better than 77.08% of its industry peers.
A Debt/Equity ratio of 0.22 indicates that MSM is not too dependend on debt financing.
With a decent Debt to Equity ratio value of 0.22, MSM is doing good in the industry, outperforming 64.58% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 1.79 | ||
| Altman-Z | 4.98 |
ROIC/WACC1.43
WACC9.8%
2.3 Liquidity
A Current Ratio of 1.92 indicates that MSM should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.92, MSM is in line with its industry, outperforming 47.92% of the companies in the same industry.
MSM has a Quick Ratio of 1.92. This is a bad value and indicates that MSM is not financially healthy enough and could expect problems in meeting its short term obligations.
MSM has a Quick ratio of 0.88. This is in the lower half of the industry: MSM underperforms 68.75% of its industry peers.
| 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%.
Measured over the past years, MSM shows a decrease in Earnings Per Share. The EPS has been decreasing by -2.08% on average per year.
The Revenue has decreased by -5.71% in the past year.
MSM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.58% yearly.
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
The Earnings Per Share is expected to grow by 9.10% on average over the next years. This is quite good.
MSM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.60% yearly.
EPS Next Y-25.65%
EPS Next 2Y-9.07%
EPS Next 3Y-0.58%
EPS Next 5Y9.1%
Revenue Next Year-2.46%
Revenue Next 2Y0.52%
Revenue Next 3Y2.06%
Revenue Next 5Y3.6%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
With a Price/Earnings ratio of 20.61, MSM is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of MSM is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 26.60, MSM is valued a bit cheaper.
The Price/Forward Earnings ratio is 20.51, which indicates a rather expensive current valuation of MSM.
The rest of the industry has a similar Price/Forward Earnings ratio as MSM.
The average S&P500 Price/Forward Earnings ratio is at 22.43. MSM is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.61 | ||
| Fwd PE | 20.51 |
4.2 Price Multiples
MSM's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, MSM is valued a bit cheaper than the industry average as 79.17% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.01 | ||
| EV/EBITDA | 11.8 |
4.3 Compensation for Growth
MSM has a very decent profitability rating, which 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
With a Yearly Dividend Yield of 4.26%, MSM is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.68, MSM pays a better dividend. On top of this MSM pays more dividend than 93.75% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, MSM pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.26% |
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
MSM pays out 88.24% of its income as dividend. This is not a sustainable payout ratio.
MSM's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP88.24%
EPS Next 2Y-9.07%
EPS Next 3Y-0.58%
81.21
-0.7 (-0.85%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners85.04%
Inst Owner Change2.56%
Ins Owners19.95%
Ins Owner Change3.45%
Market Cap4.53B
Analysts68.57
Price Target81.26 (0.06%)
Short Float %6.83%
Short Ratio4.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.26% |
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)-5.53%
PT rev (3m)-5.53%
EPS NQ rev (1m)-0.12%
EPS NQ rev (3m)-1.69%
EPS NY rev (1m)0.31%
EPS NY rev (3m)-1.19%
Revenue NQ rev (1m)-0.17%
Revenue NQ rev (3m)-0.91%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)-0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.61 | ||
| Fwd PE | 20.51 | ||
| P/S | 1.21 | ||
| P/FCF | 15.01 | ||
| P/OCF | 11.11 | ||
| P/B | 3.34 | ||
| P/tB | 8.35 | ||
| EV/EBITDA | 11.8 |
EPS(TTM)3.94
EY4.85%
EPS(NY)3.96
Fwd EY4.88%
FCF(TTM)5.41
FCFY6.66%
OCF(TTM)7.31
OCFY9%
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 | 4.98 |
F-Score4
WACC9.8%
ROIC/WACC1.43
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 5Y9.1%
Revenue 1Y (TTM)-5.71%
Revenue growth 3Y5.62%
Revenue growth 5Y2.58%
Sales Q2Q%-4.66%
Revenue Next Year-2.46%
Revenue Next 2Y0.52%
Revenue Next 3Y2.06%
Revenue Next 5Y3.6%
EBIT growth 1Y-24.87%
EBIT growth 3Y6.19%
EBIT growth 5Y0.29%
EBIT Next Year-1.91%
EBIT Next 3Y6.83%
EBIT Next 5Y9.22%
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%