Albany International (NYSE: AIN) and MSC Industrial Direct (NYSE:MSM) are both mid-cap industrials companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, dividends, institutional ownership, profitability, valuation, analyst recommendations and risk.
Institutional & Insider Ownership
90.7% of Albany International shares are held by institutional investors. Comparatively, 75.6% of MSC Industrial Direct shares are held by institutional investors. 11.6% of Albany International shares are held by company insiders. Comparatively, 31.4% of MSC Industrial Direct shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Albany International pays an annual dividend of $0.68 per share and has a dividend yield of 1.1%. MSC Industrial Direct pays an annual dividend of $1.92 per share and has a dividend yield of 2.0%. Albany International pays out 51.1% of its earnings in the form of a dividend. MSC Industrial Direct pays out 46.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Albany International has raised its dividend for 7 consecutive years and MSC Industrial Direct has raised its dividend for 7 consecutive years. MSC Industrial Direct is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
Albany International has a beta of 1.73, meaning that its share price is 73% more volatile than the S&P 500. Comparatively, MSC Industrial Direct has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.
This is a summary of recent ratings and target prices for Albany International and MSC Industrial Direct, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|MSC Industrial Direct||1||8||5||0||2.29|
MSC Industrial Direct has a consensus price target of $94.33, indicating a potential downside of 0.86%. Given MSC Industrial Direct’s stronger consensus rating and higher probable upside, analysts plainly believe MSC Industrial Direct is more favorable than Albany International.
This table compares Albany International and MSC Industrial Direct’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|MSC Industrial Direct||8.01%||19.42%||11.28%|
Earnings and Valuation
This table compares Albany International and MSC Industrial Direct’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Albany International||$779.84 million||2.61||$52.73 million||$1.33||47.59|
|MSC Industrial Direct||$2.89 billion||1.86||$231.43 million||$4.15||22.93|
MSC Industrial Direct has higher revenue and earnings than Albany International. MSC Industrial Direct is trading at a lower price-to-earnings ratio than Albany International, indicating that it is currently the more affordable of the two stocks.
MSC Industrial Direct beats Albany International on 12 of the 16 factors compared between the two stocks.
About Albany International
Albany International Corp. is focused on textiles and materials processing business. The Company operates through two segments: Machine Clothing and Albany Engineered Composites. The Company’s Machine Clothing segment supplies permeable and impermeable belts used in the manufacture of paper, paperboard, nonwovens, fiber cement and various other industrial applications. The Machine Clothing segment also supplies customized, consumable fabrics used in the manufacturing process in the pulp, corrugator, nonwovens, fiber cement, building products, and tannery and textile industries. Its Albany Engineered Composites segment includes Albany Safran Composites, LLC (ASC), in which its customer SAFRAN Group owns interest and provides engineered composite structures based on its technology to customers in the aerospace and defense industries.
About MSC Industrial Direct
MSC Industrial Direct Co., Inc. is a North American distributor of metalworking and maintenance, repair and operations (MRO) products and services. The Company’s range of MRO products include cutting tools, measuring instruments, tooling components, metalworking products, fasteners, flat stock, raw materials, abrasives, machinery hand and power tools, safety and janitorial supplies, plumbing supplies, materials handling products, power transmission components and electrical supplies. The Company serves a range of customers throughout the United States, Canada and the United Kingdom, from individual machine shops, to manufacturing companies, to government agencies, such as the General Services Administration and the Department of Defense. The Company also serves durable and non-durable goods manufacturing, education and healthcare markets, among others. As of September 3, 2016, the Company had operated a network of 12 customer fulfillment centers.
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