Critical Survey: SiteOne Landscape Supply (NYSE:SITE) and W.W. Grainger (NYSE:GWW)

SiteOne Landscape Supply (NYSE:SITE) and W.W. Grainger (NYSE:GWW) are both industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Profitability

This table compares SiteOne Landscape Supply and W.W. Grainger’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SiteOne Landscape Supply	2.53%	7.31%	3.65%
W.W. Grainger	11.08%	51.28%	22.00%

Earnings & Valuation

This table compares SiteOne Landscape Supply and W.W. Grainger”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SiteOne Landscape Supply	$4.54 billion	1.31	$123.60 million	$2.51	52.82
W.W. Grainger	$17.17 billion	2.95	$1.91 billion	$38.95	27.06

W.W. Grainger has higher revenue and earnings than SiteOne Landscape Supply. W.W. Grainger is trading at a lower price-to-earnings ratio than SiteOne Landscape Supply, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

SiteOne Landscape Supply has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500. Comparatively, W.W. Grainger has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for SiteOne Landscape Supply and W.W. Grainger, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SiteOne Landscape Supply	1	5	4	0	2.30
W.W. Grainger	2	7	2	1	2.17

SiteOne Landscape Supply presently has a consensus target price of $145.70, indicating a potential upside of 9.90%. W.W. Grainger has a consensus target price of $1,116.25, indicating a potential upside of 5.91%. Given SiteOne Landscape Supply’s stronger consensus rating and higher possible upside, equities analysts clearly believe SiteOne Landscape Supply is more favorable than W.W. Grainger.

Institutional and Insider Ownership

80.7% of W.W. Grainger shares are owned by institutional investors. 2.6% of SiteOne Landscape Supply shares are owned by insiders. Comparatively, 6.1% of W.W. Grainger shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

W.W. Grainger beats SiteOne Landscape Supply on 10 of the 15 factors compared between the two stocks.

About SiteOne Landscape Supply

SiteOne Landscape Supply, Inc., together with its subsidiaries, engages in the wholesale distribution of landscape supplies in the United States and Canada. The company provides irrigation products, including controllers, valves, sprinkler heads, irrigation pipes, micro irrigation, and drip products; fertilizer, grass seed, and ice melt products; control products, such as herbicides, fungicides, rodenticides, and other pesticides; landscape accessories that include mulches, soil amendments, drainage pipes, tools, and sods; nursery goods, which consist of deciduous and evergreen shrubs, ornamental, shade, evergreen trees, field grown and container-grown nursery stock, roses, perennials, annuals, bulbs, and plant species and cultivars; hardscapes, such as pavers, natural stones, blocks, and other durable materials; and outdoor lighting products that include lighting fixtures, LED lamps, wires, transformers, and accessories. It also offers consultative services consisting of assistance with irrigation project take-offs, commercial project planning, generation of sales leads, business operations, and product support services, as well as a series of technical and business management seminars; and distributes branded products of third parties. The company offers its products under the LESCO, SiteOne Green Tech, and Pro-Trade brand names. It markets its products primarily to residential and commercial landscape professionals who specializes in the design, installation, and maintenance of lawns, gardens, golf courses, and other outdoor spaces through branch network and direct distribution. SiteOne Landscape Supply, Inc. was incorporated in 2013 and is headquartered in Roswell, Georgia.

About W.W. Grainger

W.W. Grainger, Inc., together with its subsidiaries, distributes maintenance, repair, and operating products and services primarily in North America, Japan, the United Kingdom, and internationally. The company operates through two segments, High-Touch Solutions N.A. and Endless Assortment. The company provides safety, security, material handling and storage equipment, pumps and plumbing equipment, cleaning and maintenance, and metalworking and hand tools. It also offers technical support and inventory management services. The company serves smaller businesses to large corporations, government entities, and other institutions, as well as commercial, healthcare, and manufacturing industries through sales and service representatives, and electronic and ecommerce channels. W.W. Grainger, Inc. was founded in 1927 and is headquartered in Lake Forest, Illinois.