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 not valued too expensively and it also shows a decent growth rate. Finally MSM also has an excellent dividend rating. These ratings could make MSM a good candidate for dividend investing.
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.
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
MSM's Return On Assets of 8.66% is fine compared to the rest of the industry. MSM outperforms 77.08% of its industry peers.
The Return On Equity of MSM (15.73%) is better than 64.58% of its industry peers.
The Return On Invested Capital of MSM (14.01%) is better than 85.42% 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 9.25%.
| 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
With a decent Profit Margin value of 5.69%, MSM is doing good in the industry, outperforming 64.58% of the companies in the same industry.
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 60.42% of its industry peers.
In the last couple of years the Operating Margin of MSM has declined.
With a decent Gross Margin value of 40.90%, MSM is doing good in the industry, outperforming 72.92% 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 | 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.
The number of shares outstanding for MSM has been increased compared to 1 year ago.
MSM has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, MSM has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.84 indicates that MSM is not in any danger for bankruptcy at the moment.
MSM has a Altman-Z score of 4.84. This is in the better half of the industry: MSM outperforms 79.17% 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.
The Debt to FCF ratio of MSM (1.79) is better than 79.17% of its industry peers.
A Debt/Equity ratio of 0.22 indicates that MSM is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.22, MSM is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 1.79 | ||
| Altman-Z | 4.84 |
ROIC/WACC1.44
WACC9.71%
2.3 Liquidity
A Current Ratio of 1.92 indicates that MSM should not have too much problems paying its short term obligations.
The Current ratio of MSM (1.92) is comparable to the rest of the 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 worse Quick ratio (0.88) than 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.92 | ||
| Quick Ratio | 0.88 |
3. Growth
3.1 Past
The earnings per share for MSM have decreased strongly by -32.19% 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.
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
MSM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.10% yearly.
Based on estimates for the next years, MSM will show a small growth in Revenue. The Revenue will grow by 3.60% on average per year.
EPS Next Y-24.75%
EPS Next 2Y-6.92%
EPS Next 3Y1.73%
EPS Next 5Y9.1%
Revenue Next Year-2.4%
Revenue Next 2Y0.58%
Revenue Next 3Y2.55%
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
MSM is valuated rather expensively with a Price/Earnings ratio of 19.62.
Compared to the rest of the industry, the Price/Earnings ratio of MSM is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 28.29. MSM is valued slightly cheaper when compared to this.
MSM is valuated rather expensively with a Price/Forward Earnings ratio of 18.63.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MSM is on the same level as its industry peers.
MSM is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.08, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.62 | ||
| Fwd PE | 18.63 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as MSM.
83.33% of the companies in the same industry are more expensive than MSM, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.29 | ||
| EV/EBITDA | 11.2 |
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-6.92%
EPS Next 3Y1.73%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.49%, MSM is a good candidate for dividend investing.
MSM's Dividend Yield is rather good when compared to the industry average which is at 2.26. MSM pays more dividend than 91.67% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.57, MSM pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.49% |
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-6.92%
EPS Next 3Y1.73%
77.31
+1.47 (+1.94%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners85.04%
Inst Owner Change0%
Ins Owners19.95%
Ins Owner Change-0.07%
Market Cap4.31B
Analysts68.57
Price Target86.02 (11.27%)
Short Float %6.83%
Short Ratio4.82
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.49% |
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)0%
PT rev (3m)7.29%
EPS NQ rev (1m)-0.61%
EPS NQ rev (3m)-7.19%
EPS NY rev (1m)0%
EPS NY rev (3m)-3.38%
Revenue NQ rev (1m)-0.74%
Revenue NQ rev (3m)-1.54%
Revenue NY rev (1m)-0.68%
Revenue NY rev (3m)-0.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.62 | ||
| Fwd PE | 18.63 | ||
| P/S | 1.15 | ||
| P/FCF | 14.29 | ||
| P/OCF | 10.58 | ||
| P/B | 3.18 | ||
| P/tB | 7.95 | ||
| EV/EBITDA | 11.2 |
EPS(TTM)3.94
EY5.1%
EPS(NY)4.15
Fwd EY5.37%
FCF(TTM)5.41
FCFY7%
OCF(TTM)7.31
OCFY9.45%
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 | 4.84 |
F-Score4
WACC9.71%
ROIC/WACC1.44
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-24.75%
EPS Next 2Y-6.92%
EPS Next 3Y1.73%
EPS Next 5Y9.1%
Revenue 1Y (TTM)-5.71%
Revenue growth 3Y5.62%
Revenue growth 5Y2.58%
Sales Q2Q%-4.66%
Revenue Next Year-2.4%
Revenue Next 2Y0.58%
Revenue Next 3Y2.55%
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%