MSC INDUSTRIAL DIRECT CO-A (MSM) Stock Fundamental Analysis
NYSE:MSM - New York Stock Exchange, Inc. - US5535301064 - Common Stock - Currency: USD
Overall MSM gets a fundamental rating of 5 out of 10. We evaluated MSM against 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 correct valuation and a medium 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.
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 9.54%, MSM is doing good in the industry, outperforming 77.08% of the companies in the same industry.
MSM's Return On Equity of 17.15% is fine compared to the rest of the industry. MSM outperforms 60.42% of its industry peers.
MSM has a better Return On Invested Capital (15.34%) than 87.50% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MSM is significantly above the industry average of 9.86%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.54% | ||
| ROE | 17.15% | ||
| ROIC | 15.34% |
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 6.21%, MSM is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
In the last couple of years the Profit Margin of MSM has declined.
MSM's Operating Margin of 9.96% is fine compared to the rest of the industry. MSM outperforms 66.67% of its industry peers.
MSM's Operating Margin has declined in the last couple of years.
The Gross Margin of MSM (41.05%) is better than 72.92% of its industry peers.
MSM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.96% | ||
| PM (TTM) | 6.21% | ||
| GM | 41.05% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), MSM is creating some value.
MSM has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, MSM has more shares outstanding
MSM has a worse debt/assets ratio than last year.
2.2 Solvency
MSM has an Altman-Z score of 5.11. This indicates that MSM is financially healthy and has little risk of bankruptcy at the moment.
MSM has a Altman-Z score of 5.11. This is amongst the best in the industry. MSM outperforms 87.50% of its industry peers.
MSM has a debt to FCF ratio of 1.57. This is a very positive value and a sign of high solvency as it would only need 1.57 years to pay back of all of its debts.
The Debt to FCF ratio of MSM (1.57) is better than 79.17% of its industry peers.
A Debt/Equity ratio of 0.21 indicates that MSM is not too dependend on debt financing.
The Debt to Equity ratio of MSM (0.21) is better than 68.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 1.57 | ||
| Altman-Z | 5.11 |
ROIC/WACC1.43
WACC10.7%
2.3 Liquidity
A Current Ratio of 1.93 indicates that MSM should not have too much problems paying its short term obligations.
MSM's Current ratio of 1.93 is in line compared to the rest of the industry. MSM outperforms 47.92% of its industry peers.
A Quick Ratio of 0.91 indicates that MSM may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.91, MSM is doing worse than 72.92% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.93 | ||
| Quick Ratio | 0.91 |
3. Growth
3.1 Past
MSM shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -27.63%.
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.
MSM shows a decrease in Revenue. In the last year, the revenue decreased by -5.24%.
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)-27.63%
EPS 3Y-0.14%
EPS 5Y-2.08%
EPS Q2Q%-31.2%
Revenue 1Y (TTM)-5.24%
Revenue growth 3Y5.62%
Revenue growth 5Y2.58%
Sales Q2Q%-2.67%
3.2 Future
Based on estimates for the next years, MSM will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.36% on average per year.
Based on estimates for the next years, MSM will show a small growth in Revenue. The Revenue will grow by 3.61% on average per year.
EPS Next Y-24.75%
EPS Next 2Y-6.92%
EPS Next 3Y1.73%
EPS Next 5Y9.36%
Revenue Next Year-1.73%
Revenue Next 2Y1.3%
Revenue Next 3Y2.88%
Revenue Next 5Y3.61%
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
A Price/Earnings ratio of 18.34 indicates a rather expensive valuation of MSM.
MSM's Price/Earnings is on the same level as the industry average.
MSM is valuated rather cheaply when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 19.45, which indicates a rather expensive current valuation of MSM.
MSM's Price/Forward Earnings ratio is in line with the industry average.
MSM's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.34 | ||
| Fwd PE | 19.45 |
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 | 13.65 | ||
| EV/EBITDA | 11.07 |
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 4.15%, MSM is a good candidate for dividend investing.
MSM's Dividend Yield is rather good when compared to the industry average which is at 1.87. MSM pays more dividend than 97.92% of the companies in the same industry.
MSM's Dividend Yield is rather good when compared to the S&P500 average which is at 2.29.
| 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 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 79.55% 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.
DP79.55%
EPS Next 2Y-6.92%
EPS Next 3Y1.73%
80.71
-2.33 (-2.81%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryTrading Companies & Distributors
Earnings (Last)
Earnings (Next)
Inst Owners81.27%
Inst Owner Change1.53%
Ins Owners19.87%
Ins Owner Change-0.04%
Market Cap4.51B
Analysts68.57
Price Target86.02 (6.58%)
Short Float %6.96%
Short Ratio4.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.15% |
Yearly Dividend3.36
Dividend Growth(5Y)5.09%
DP79.55%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)5.58%
Min EPS beat(2)-5.6%
Max EPS beat(2)16.76%
EPS beat(4)2
Avg EPS beat(4)2.77%
Min EPS beat(4)-5.6%
Max EPS beat(4)16.76%
EPS beat(8)4
Avg EPS beat(8)1.42%
EPS beat(12)7
Avg EPS beat(12)1.61%
EPS beat(16)9
Avg EPS beat(16)1.52%
Revenue beat(2)1
Avg Revenue beat(2)-0.07%
Min Revenue beat(2)-1.76%
Max Revenue beat(2)1.62%
Revenue beat(4)1
Avg Revenue beat(4)-0.81%
Min Revenue beat(4)-2.16%
Max Revenue beat(4)1.62%
Revenue beat(8)4
Avg Revenue beat(8)0.04%
Revenue beat(12)6
Avg Revenue beat(12)-0.05%
Revenue beat(16)8
Avg Revenue beat(16)-0.17%
PT rev (1m)7.29%
PT rev (3m)-0.32%
EPS NQ rev (1m)-4.75%
EPS NQ rev (3m)-49.04%
EPS NY rev (1m)-3.38%
EPS NY rev (3m)-3.89%
Revenue NQ rev (1m)-0.74%
Revenue NQ rev (3m)-8.78%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)-0.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.34 | ||
| Fwd PE | 19.45 | ||
| P/S | 1.19 | ||
| P/FCF | 13.65 | ||
| P/OCF | 10.45 | ||
| P/B | 3.28 | ||
| P/tB | 8.11 | ||
| EV/EBITDA | 11.07 |
EPS(TTM)4.4
EY5.45%
EPS(NY)4.15
Fwd EY5.14%
FCF(TTM)5.91
FCFY7.33%
OCF(TTM)7.72
OCFY9.57%
SpS67.95
BVpS24.62
TBVpS9.95
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.54% | ||
| ROE | 17.15% | ||
| ROCE | 20.47% | ||
| ROIC | 15.34% | ||
| ROICexc | 15.83% | ||
| ROICexgc | 29.2% | ||
| OM | 9.96% | ||
| PM (TTM) | 6.21% | ||
| GM | 41.05% | ||
| FCFM | 8.7% |
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-Score6
Asset Turnover1.53
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.21 | ||
| Debt/FCF | 1.57 | ||
| Debt/EBITDA | 0.63 | ||
| Cap/Depr | 122.17% | ||
| Cap/Sales | 2.66% | ||
| Interest Coverage | 14.49 | ||
| Cash Conversion | 93.6% | ||
| Profit Quality | 140.02% | ||
| Current Ratio | 1.93 | ||
| Quick Ratio | 0.91 | ||
| Altman-Z | 5.11 |
F-Score6
WACC10.7%
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)-27.63%
EPS 3Y-0.14%
EPS 5Y-2.08%
EPS Q2Q%-31.2%
EPS Next Y-24.75%
EPS Next 2Y-6.92%
EPS Next 3Y1.73%
EPS Next 5Y9.36%
Revenue 1Y (TTM)-5.24%
Revenue growth 3Y5.62%
Revenue growth 5Y2.58%
Sales Q2Q%-2.67%
Revenue Next Year-1.73%
Revenue Next 2Y1.3%
Revenue Next 3Y2.88%
Revenue Next 5Y3.61%
EBIT growth 1Y-20.57%
EBIT growth 3Y6.19%
EBIT growth 5Y0.29%
EBIT Next Year-1.12%
EBIT Next 3Y7.51%
EBIT Next 5Y9.46%
FCF growth 1Y71.29%
FCF growth 3Y22.15%
FCF growth 5Y2.39%
OCF growth 1Y63.16%
OCF growth 3Y22.3%
OCF growth 5Y4.57%