MSC INDUSTRIAL DIRECT CO-A (MSM) Stock Fundamental Analysis
NYSE:MSM - New York Stock Exchange, Inc. - US5535301064 - Common Stock - Currency: USD
Taking everything into account, MSM scores 5 out of 10 in our fundamental rating. MSM was compared to 48 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 does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
MSM had positive earnings in the past year.
MSM had a positive operating cash flow in the past year.
Each year in the past 5 years MSM has been profitable.
MSM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.02%, MSM is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
With a decent Return On Equity value of 14.52%, MSM is doing good in the industry, outperforming 64.58% of the companies in the same industry.
MSM's Return On Invested Capital of 13.01% is amongst the best of the industry. MSM outperforms 85.42% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MSM is significantly above the industry average of 9.62%.
The last Return On Invested Capital (13.01%) for MSM is well below the 3 year average (17.86%), which needs to be investigated, but indicates that MSM had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.02% | ||
| ROE | 14.52% | ||
| ROIC | 13.01% |
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 5.30%, MSM is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
MSM's Profit Margin has declined in the last couple of years.
The Operating Margin of MSM (8.49%) is better than 62.50% of its industry peers.
MSM's Operating Margin has declined in the last couple of years.
With a decent Gross Margin value of 40.92%, MSM is doing good in the industry, outperforming 77.08% of the companies in the same industry.
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 | 8.49% | ||
| PM (TTM) | 5.3% | ||
| GM | 40.92% |
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 just above the Cost of Capital (WACC), so MSM is still creating some 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.
The debt/assets ratio for MSM is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 5.05 indicates that MSM is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.05, MSM is in the better half of the industry, outperforming 77.08% of the companies in the same industry.
The Debt to FCF ratio of MSM is 1.98, which is an excellent value as it means it would take MSM, only 1.98 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of MSM (1.98) is better than 75.00% of its industry peers.
MSM has a Debt/Equity ratio of 0.21. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.21, MSM is doing good in the industry, outperforming 64.58% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 1.98 | ||
| Altman-Z | 5.05 |
ROIC/WACC1.29
WACC10.09%
2.3 Liquidity
A Current Ratio of 1.92 indicates that MSM should not have too much problems paying its short term obligations.
MSM has a Current ratio (1.92) which is in line with its industry peers.
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 0.91. 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 | 0.91 |
3. Growth
3.1 Past
The earnings per share for MSM have decreased strongly by -31.67% in the last year.
The Earnings Per Share has been decreasing by -2.08% on average over the past years.
MSM shows a decrease in Revenue. In the last year, the revenue decreased by -4.11%.
Measured over the past years, MSM shows a small growth in Revenue. The Revenue has been growing by 2.58% on average per year.
EPS 1Y (TTM)-31.67%
EPS 3Y-0.14%
EPS 5Y-2.08%
EPS Q2Q%-18.8%
Revenue 1Y (TTM)-4.11%
Revenue growth 3Y5.62%
Revenue growth 5Y2.58%
Sales Q2Q%-0.84%
3.2 Future
The Earnings Per Share is expected to grow by 6.70% on average over the next years.
MSM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.21% yearly.
EPS Next Y-23.19%
EPS Next 2Y-6.95%
EPS Next 3Y-0.37%
EPS Next 5Y6.7%
Revenue Next Year-2.17%
Revenue Next 2Y0.99%
Revenue Next 3Y2.27%
Revenue Next 5Y3.21%
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
MSM is valuated rather expensively with a Price/Earnings ratio of 23.61.
MSM's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.53. MSM is around the same levels.
Based on the Price/Forward Earnings ratio of 21.01, the valuation of MSM can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MSM is on the same level as its industry peers.
MSM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 36.71.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.61 | ||
| Fwd PE | 21.01 |
4.2 Price Multiples
MSM's Enterprise Value to EBITDA ratio is in line with the industry average.
MSM's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. MSM is cheaper than 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.41 | ||
| EV/EBITDA | 12.9 |
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-6.95%
EPS Next 3Y-0.37%
5. Dividend
5.1 Amount
MSM has a Yearly Dividend Yield of 3.90%.
MSM's Dividend Yield is rather good when compared to the industry average which is at 2.91. MSM pays more dividend than 87.50% of the companies in the same industry.
MSM's Dividend Yield is rather good when compared to the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.9% |
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 95.14% 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.
DP95.14%
EPS Next 2Y-6.95%
EPS Next 3Y-0.37%
87.13
+1.16 (+1.35%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners89%
Inst Owner Change-0.45%
Ins Owners20.29%
Ins Owner Change4.93%
Market Cap4.85B
Analysts70
Price Target90.39 (3.74%)
Short Float %6.04%
Short Ratio4.62
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.9% |
Yearly Dividend3.36
Dividend Growth(5Y)5.09%
DP95.14%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.24%
Min EPS beat(2)3.94%
Max EPS beat(2)4.54%
EPS beat(4)3
Avg EPS beat(4)4.91%
Min EPS beat(4)-5.6%
Max EPS beat(4)16.76%
EPS beat(8)5
Avg EPS beat(8)1.78%
EPS beat(12)7
Avg EPS beat(12)1.64%
EPS beat(16)10
Avg EPS beat(16)1.91%
Revenue beat(2)0
Avg Revenue beat(2)-1.37%
Min Revenue beat(2)-1.85%
Max Revenue beat(2)-0.9%
Revenue beat(4)1
Avg Revenue beat(4)-0.72%
Min Revenue beat(4)-1.85%
Max Revenue beat(4)1.62%
Revenue beat(8)2
Avg Revenue beat(8)-0.86%
Revenue beat(12)6
Avg Revenue beat(12)-0.17%
Revenue beat(16)7
Avg Revenue beat(16)-0.31%
PT rev (1m)9.4%
PT rev (3m)5.08%
EPS NQ rev (1m)5.94%
EPS NQ rev (3m)6.4%
EPS NY rev (1m)3.15%
EPS NY rev (3m)3.64%
Revenue NQ rev (1m)1.3%
Revenue NQ rev (3m)1.35%
Revenue NY rev (1m)0.27%
Revenue NY rev (3m)0.24%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.61 | ||
| Fwd PE | 21.01 | ||
| P/S | 1.3 | ||
| P/FCF | 18.41 | ||
| P/OCF | 13.45 | ||
| P/B | 3.55 | ||
| P/tB | 8.75 | ||
| EV/EBITDA | 12.9 |
EPS(TTM)3.69
EY4.24%
EPS(NY)4.15
Fwd EY4.76%
FCF(TTM)4.73
FCFY5.43%
OCF(TTM)6.48
OCFY7.44%
SpS67.23
BVpS24.55
TBVpS9.95
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.02% | ||
| ROE | 14.52% | ||
| ROCE | 17.36% | ||
| ROIC | 13.01% | ||
| ROICexc | 13.54% | ||
| ROICexgc | 25.17% | ||
| OM | 8.49% | ||
| PM (TTM) | 5.3% | ||
| GM | 40.92% | ||
| FCFM | 7.04% |
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-Score5
Asset Turnover1.51
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 1.98 | ||
| Debt/EBITDA | 0.7 | ||
| Cap/Depr | 110.29% | ||
| Cap/Sales | 2.6% | ||
| Interest Coverage | 12.96 | ||
| Cash Conversion | 88.85% | ||
| Profit Quality | 132.79% | ||
| Current Ratio | 1.92 | ||
| Quick Ratio | 0.91 | ||
| Altman-Z | 5.05 |
F-Score5
WACC10.09%
ROIC/WACC1.29
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)-31.67%
EPS 3Y-0.14%
EPS 5Y-2.08%
EPS Q2Q%-18.8%
EPS Next Y-23.19%
EPS Next 2Y-6.95%
EPS Next 3Y-0.37%
EPS Next 5Y6.7%
Revenue 1Y (TTM)-4.11%
Revenue growth 3Y5.62%
Revenue growth 5Y2.58%
Sales Q2Q%-0.84%
Revenue Next Year-2.17%
Revenue Next 2Y0.99%
Revenue Next 3Y2.27%
Revenue Next 5Y3.21%
EBIT growth 1Y-26.43%
EBIT growth 3Y6.19%
EBIT growth 5Y0.29%
EBIT Next Year-3.64%
EBIT Next 3Y5.51%
EBIT Next 5Y7.1%
FCF growth 1Y-55.88%
FCF growth 3Y22.15%
FCF growth 5Y2.39%
OCF growth 1Y-46.8%
OCF growth 3Y22.3%
OCF growth 5Y4.57%