MSC INDUSTRIAL DIRECT CO-A (MSM) Stock Fundamental Analysis
NYSE:MSM - New York Stock Exchange, Inc. - US5535301064 - Common Stock - Currency: USD
MSM gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 50 industry peers in the Trading Companies & Distributors industry. MSM scores excellent on profitability, but there are some minor concerns on its financial health. MSM has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year MSM was profitable.
In the past year MSM had a positive cash flow from operations.
In the past 5 years MSM has always been profitable.
In the past 5 years MSM always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 8.02%, MSM is doing good in the industry, outperforming 70.00% of the companies in the same industry.
The Return On Equity of MSM (14.52%) is better than 64.00% of its industry peers.
MSM has a better Return On Invested Capital (13.01%) than 84.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MSM is significantly above the industry average of 9.94%.
The 3 year average ROIC (17.86%) for MSM is well above the current ROIC(13.01%). The reason for the recent decline needs to be investigated.
| 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
MSM's Profit Margin of 5.30% is fine compared to the rest of the industry. MSM outperforms 62.00% of its industry peers.
MSM's Profit Margin has declined in the last couple of years.
With a decent Operating Margin value of 8.49%, MSM is doing good in the industry, outperforming 62.00% of the companies in the same industry.
MSM's Operating Margin has declined in the last couple of years.
MSM has a better Gross Margin (40.92%) than 78.00% 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 | 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
MSM has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
MSM has more shares outstanding than it did 1 year ago.
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
MSM has an Altman-Z score of 5.07. This indicates that MSM is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 5.07, MSM is doing good in the industry, outperforming 80.00% of the companies in the same industry.
MSM has a debt to FCF ratio of 1.98. This is a very positive value and a sign of high solvency as it would only need 1.98 years to pay back of all of its debts.
MSM has a Debt to FCF ratio of 1.98. This is in the better half of the industry: MSM outperforms 74.00% of its industry peers.
A Debt/Equity ratio of 0.21 indicates that MSM is not too dependend on debt financing.
MSM has a Debt to Equity ratio of 0.21. This is in the better half of the industry: MSM outperforms 64.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 1.98 | ||
| Altman-Z | 5.07 |
ROIC/WACC1.31
WACC9.93%
2.3 Liquidity
A Current Ratio of 1.92 indicates that MSM should not have too much problems paying its short term obligations.
With a Current ratio value of 1.92, MSM perfoms like the industry average, outperforming 50.00% 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.
With a Quick ratio value of 0.91, MSM is not doing good in the industry: 68.00% of the companies in the same industry are doing better.
| 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.
MSM shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -2.08% yearly.
Looking at the last year, MSM shows a decrease in Revenue. The Revenue has decreased by -4.11% in the last year.
The Revenue has been growing slightly by 2.58% on average over the past years.
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.
The Revenue is expected to grow by 3.21% on average over the next years.
EPS Next Y-23.19%
EPS Next 2Y-6.95%
EPS Next 3Y-0.37%
EPS Next 5Y6.7%
Revenue Next Year-2.15%
Revenue Next 2Y1%
Revenue Next 3Y2.28%
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
With a Price/Earnings ratio of 24.07, MSM is valued on the expensive side.
MSM's Price/Earnings ratio is in line with the industry average.
MSM's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.11.
With a Price/Forward Earnings ratio of 21.42, MSM is valued on the expensive side.
The rest of the industry has a similar Price/Forward Earnings ratio as MSM.
MSM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 35.78.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.07 | ||
| Fwd PE | 21.42 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as MSM.
Based on the Price/Free Cash Flow ratio, MSM is valued a bit cheaper than the industry average as 76.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.77 | ||
| EV/EBITDA | 12.95 |
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 3.95%. Purely for dividend investing, there may be better candidates out there.
MSM's Dividend Yield is rather good when compared to the industry average which is at 2.04. MSM pays more dividend than 96.00% of the companies in the same industry.
MSM's Dividend Yield is rather good when compared to the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.95% |
5.2 History
The dividend of MSM has a limited annual growth rate of 5.09%.
MSM has been paying a dividend for at least 10 years, so it has 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.
The dividend of MSM is growing, but earnings are growing more, so the dividend growth is sustainable.
DP95.14%
EPS Next 2Y-6.95%
EPS Next 3Y-0.37%
88.83
+2.44 (+2.82%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners88.59%
Inst Owner Change-0.73%
Ins Owners20.41%
Ins Owner Change4.77%
Market Cap4.95B
Analysts69.33
Price Target91.92 (3.48%)
Short Float %6.22%
Short Ratio4.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.95% |
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)11.26%
PT rev (3m)13.12%
EPS NQ rev (1m)0.76%
EPS NQ rev (3m)7.21%
EPS NY rev (1m)0%
EPS NY rev (3m)3.64%
Revenue NQ rev (1m)0.13%
Revenue NQ rev (3m)1.49%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)0.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.07 | ||
| Fwd PE | 21.42 | ||
| P/S | 1.32 | ||
| P/FCF | 18.77 | ||
| P/OCF | 13.71 | ||
| P/B | 3.62 | ||
| P/tB | 8.92 | ||
| EV/EBITDA | 12.95 |
EPS(TTM)3.69
EY4.15%
EPS(NY)4.15
Fwd EY4.67%
FCF(TTM)4.73
FCFY5.33%
OCF(TTM)6.48
OCFY7.29%
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 | 5.07 |
F-Score5
WACC9.93%
ROIC/WACC1.31
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-2.15%
Revenue Next 2Y1%
Revenue Next 3Y2.28%
Revenue Next 5Y3.21%
EBIT growth 1Y-26.43%
EBIT growth 3Y6.19%
EBIT growth 5Y0.29%
EBIT Next Year-1.04%
EBIT Next 3Y5.29%
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%