Comparing W.W. Grainger (NYSE:GWW) & Siemens (OTCMKTS:SIEGY)

Siemens (OTCMKTS:SIEGY) and W.W. Grainger (NYSE:GWW) are both large-cap industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations for Siemens and W.W. Grainger, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Siemens	1	8	1	0	2.00
W.W. Grainger	2	7	3	1	2.23

W.W. Grainger has a consensus price target of $1,073.88, indicating a potential upside of 11.12%. Given W.W. Grainger’s stronger consensus rating and higher probable upside, analysts plainly believe W.W. Grainger is more favorable than Siemens.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Siemens	12.59%	12.61%	5.01%
W.W. Grainger	10.99%	49.63%	21.63%

Earnings and Valuation

This table compares Siemens 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
Siemens	$82.35 billion	2.77	$9.00 billion	$6.75	21.14
W.W. Grainger	$17.17 billion	2.69	$1.91 billion	$39.41	24.52

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

Dividends

Siemens pays an annual dividend of $2.00 per share and has a dividend yield of 1.4%. W.W. Grainger pays an annual dividend of $9.04 per share and has a dividend yield of 0.9%. Siemens pays out 29.6% of its earnings in the form of a dividend. W.W. Grainger pays out 22.9% 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. W.W. Grainger has raised its dividend for 55 consecutive years.

Institutional & Insider Ownership

0.8% of Siemens shares are owned by institutional investors. Comparatively, 80.7% of W.W. Grainger shares are owned by institutional investors. 6.1% of W.W. Grainger shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Siemens has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, W.W. Grainger has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500.

Summary

W.W. Grainger beats Siemens on 12 of the 17 factors compared between the two stocks.

About Siemens

Siemens Aktiengesellschaft, a technology company, focuses in the areas of automation and digitalization in Europe, Commonwealth of Independent States, Africa, the Middle East, the Americas, Asia, and Australia. It operates through Digital Industries, Smart Infrastructure, Mobility, Siemens Healthineers, and Siemens Financial Services (SFS) segments. The Digital Industries segment provides automation systems and software for factories, numerical control systems, servo motors, drives and inverters, and integrated automation systems for machine tools and production machines; process control systems, machine-to-machine communication products, sensors and radio frequency identification systems; software for production and product lifecycle management, and simulation and testing of mechatronic systems; and the Mendix cloud-native low-code application development platform. The Smart Infrastructure segment offers products, systems, solutions, services, and software to support sustainable transition in energy generation from fossil and renewable sources; sustainable buildings and communities; and buildings, electrification, and electrical products. The Mobility segment provides rail passenger and freight transportation, such as vehicles, trams and light rail, and commuter trains, as well as trains and passenger coaches; locomotives and solutions for automated transportation; products and solutions for rail automation; electrification products; maintenance and digital services; and digital and cloud-based solutions, and related services. The Siemens Healthineers segment develops, manufactures, and sells various diagnostic and therapeutic products and services; and provides clinical consulting and training services. The SFS segment offers debt and equity investments; leasing, lending, and working capital, structured, equipment, and project financing; and financial advisory services. Siemens Aktiengesellschaft was founded in 1847 and is headquartered in Munich, Germany.

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.