Critical Survey: Andritz (OTCMKTS:ADRZY) vs. W.W. Grainger (NYSE:GWW)

W.W. Grainger (NYSE:GWW) and Andritz (OTCMKTS:ADRZY) are both industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, profitability, valuation, risk and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
W.W. Grainger	9.75%	49.40%	21.84%
Andritz	5.84%	20.50%	5.64%

Insider and Institutional Ownership

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

Volatility and Risk

W.W. Grainger has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500. Comparatively, Andritz has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for W.W. Grainger and Andritz, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
W.W. Grainger	2	6	1	0	1.89
Andritz	0	1	1	0	2.50

W.W. Grainger currently has a consensus price target of $1,009.43, suggesting a potential upside of 3.61%. Given W.W. Grainger’s higher probable upside, equities analysts clearly believe W.W. Grainger is more favorable than Andritz.

Valuation & Earnings

This table compares W.W. Grainger and Andritz”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
W.W. Grainger	$17.17 billion	2.70	$1.91 billion	$35.66	27.32
Andritz	$9.00 billion	0.87	$537.26 million	$1.03	14.65

W.W. Grainger has higher revenue and earnings than Andritz. Andritz 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

W.W. Grainger pays an annual dividend of $9.04 per share and has a dividend yield of 0.9%. Andritz pays an annual dividend of $0.35 per share and has a dividend yield of 2.3%. W.W. Grainger pays out 25.4% of its earnings in the form of a dividend. Andritz pays out 34.0% 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.

Summary

W.W. Grainger beats Andritz on 14 of the 16 factors compared between the two stocks.

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.

About Andritz

Andritz AG provides plants, equipment, and services for pulp and paper industry, metalworking and steel industries, hydropower stations, and solid/liquid separation in the municipal and industrial sectors in Europe, North America, South America, China, Asia, and internationally. It operates through four segments: Pulp & Paper, Metals, Hydro, and Separation. The Pulp & Paper segment supplies technology, automation, and service solutions to produce pulp, paper, board, and tissue; boilers for power generation; flue gas cleaning systems; nonwovens technologies; panelboard production systems; and recycling, shredding, and energy solutions for various waste materials. The Metals segment provides technologies, plants, and digital solutions, including automation and software solutions, and process know-how and services; and solutions for the production and processing of flat products for welding systems and industrial furnaces, as well as services for the metals processing industry. The Hydro segment supplies electromechanical equipment and services for hydropower plants; offers plant diagnosis, refurbishment, modernization, and upgradation of existing hydropower plants; and pumps for irrigation, water supply, and flood control, as well as turbo generators. The Separation segment offers mechanical and thermal technologies, as well as services and related automation solutions for solid/liquid separation to serve chemical, environmental, food, mining, and minerals industries; and technologies and services to produce animal feed and biomass pellets. The company was founded in 1852 and is headquartered in Graz, Austria.