Comparing MSC Industrial Direct (NYSE:MSM) and Ashtead Group (OTCMKTS:ASHTY)

Ashtead Group (OTCMKTS:ASHTY) and MSC Industrial Direct (NYSE:MSM) are both industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Profitability

This table compares Ashtead Group and MSC Industrial Direct’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ashtead Group	13.09%	20.77%	7.22%
MSC Industrial Direct	5.37%	15.73%	8.78%

Analyst Ratings

This is a breakdown of current ratings and price targets for Ashtead Group and MSC Industrial Direct, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ashtead Group	1	2	3	0	2.33
MSC Industrial Direct	0	9	0	0	2.00

MSC Industrial Direct has a consensus target price of $90.50, indicating a potential downside of 1.15%. Given MSC Industrial Direct’s higher possible upside, analysts clearly believe MSC Industrial Direct is more favorable than Ashtead Group.

Earnings and Valuation

This table compares Ashtead Group and MSC Industrial Direct”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ashtead Group	$10.79 billion	2.47	$1.51 billion	$13.22	19.26
MSC Industrial Direct	$3.77 billion	1.36	$199.33 million	$3.66	25.01

Ashtead Group has higher revenue and earnings than MSC Industrial Direct. Ashtead Group is trading at a lower price-to-earnings ratio than MSC Industrial Direct, indicating that it is currently the more affordable of the two stocks.

Dividends

Ashtead Group pays an annual dividend of $5.63 per share and has a dividend yield of 2.2%. MSC Industrial Direct pays an annual dividend of $3.48 per share and has a dividend yield of 3.8%. Ashtead Group pays out 42.6% of its earnings in the form of a dividend. MSC Industrial Direct pays out 95.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MSC Industrial Direct has raised its dividend for 3 consecutive years. MSC Industrial Direct is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

0.8% of Ashtead Group shares are held by institutional investors. Comparatively, 79.3% of MSC Industrial Direct shares are held by institutional investors. 19.0% of MSC Industrial Direct shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Ashtead Group beats MSC Industrial Direct on 9 of the 16 factors compared between the two stocks.

About Ashtead Group

Ashtead Group plc, together with its subsidiaries, engages in the construction, industrial, and general equipment rental business in the United States, the United Kingdom, and Canada. It provides pumps, power generation, heating, cooling, scaffolding, traffic management, temporary flooring, trench shoring, and lifting services. The company offers its products and services for facilities maintenance and municipalities, such as office complexes, apartment complexes, government, hospitals, data centers, parks and recreation departments, schools and universities, shopping centers, pavement/kerb repairs, and golf course maintenance; construction of airports, highways and bridges, office buildings, data centers, schools and universities, shopping centers, residential, remodeling, manufacturing plants, and green energy plants; emergency response for fire, hurricanes, flooding, tornadoes, winter, storms, residential and health emergencies, alternative care facilities, points of distribution, and mobile testing facilities; and entertainment and special events, including national events, concerts, sporting events, film and telvision production, theme parks, festivals farmers' markets, local 5k runs, and cycle races. It operates 1,094 stores in the United States, 119 stores in Canada, and 185 stores in the United Kingdom under the Sunbelt Rentals brand. The company was founded in 1947 and is headquartered in London, the United Kingdom.

About MSC Industrial Direct

MSC Industrial Direct Co., Inc., together with its subsidiaries, distributes metalworking and maintenance, repair, and operations (MRO) products and services in the United States, Canada, Mexico, the United Kingdom, and internationally. The company's MRO products include cutting tools, measuring instruments, tooling components, metalworking products, fasteners, flat stock products, raw materials, abrasives, machinery hand and power tools, safety and janitorial supplies, plumbing supplies, materials handling products, power transmission components, and electrical supplies. It offers stock-keeping units through its catalogs and brochures; e-commerce channels, including its website, mscdirect.com; inventory management solutions; and customer care centers, customer fulfillment centers, regional inventory centers, and warehouses. The company serves individual machine shops, manufacturing companies, and government agencies. MSC Industrial Direct Co., Inc. was founded in 1941 and is headquartered in Melville, New York.