Analyzing W.W. Grainger (NYSE:GWW) & Global Industrial (NYSE:GIC)

W.W. Grainger (NYSE:GWW) and Global Industrial (NYSE:GIC) are both industrials companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, dividends and analyst recommendations.

Institutional and Insider Ownership

80.7% of W.W. Grainger shares are owned by institutional investors. Comparatively, 31.2% of Global Industrial shares are owned by institutional investors. 6.1% of W.W. Grainger shares are owned by insiders. Comparatively, 65.3% of Global Industrial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for W.W. Grainger and Global Industrial, 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
Global Industrial	1	1	0	0	1.50

W.W. Grainger presently has a consensus price target of $1,009.43, indicating a potential downside of 1.65%. Given W.W. Grainger’s stronger consensus rating and higher possible upside, research analysts plainly believe W.W. Grainger is more favorable than Global Industrial.

Profitability

This table compares W.W. Grainger and Global Industrial’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%
Global Industrial	5.11%	22.85%	12.11%

Valuation & Earnings

This table compares W.W. Grainger and Global Industrial”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	2.84	$1.91 billion	$35.66	28.78
Global Industrial	$1.32 billion	0.88	$61.00 million	$1.75	17.15

W.W. Grainger has higher revenue and earnings than Global Industrial. Global Industrial 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%. Global Industrial pays an annual dividend of $1.04 per share and has a dividend yield of 3.5%. W.W. Grainger pays out 25.4% of its earnings in the form of a dividend. Global Industrial pays out 59.4% 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 and Global Industrial has raised its dividend for 9 consecutive years.

Volatility & Risk

W.W. Grainger has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500. Comparatively, Global Industrial has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Summary

W.W. Grainger beats Global Industrial on 15 of the 17 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 Global Industrial

Global Industrial Company operates as an industrial distributor of various industrial and maintenance, repair, and operation (MRO) products in North America. It offers storage and shelving, safety and security, carts and trucks, HVAC and fans, furniture and decor, material handling, janitorial and facility maintenance, workbenches and shop desks, tools and instruments, plumbing and pumps, office and school supplies, packaging and shipping, lighting and electrical, foodservice and retail, medical and laboratory, motors and power transmission, building supplies, machining, fasteners and hardware, vehicle maintenance, and raw materials. The company offers industrial and MRO products under the Global, GlobalIndustrial.com, Nexel, Paramount, Interion, and Absocold trademarks. It serves businesses; state, local, and private educational organizations; and government entities through relationship marketers, e-commerce sites, signature campaigns, and catalogs. The company was formerly known as Systemax Inc. Global Industrial Company was founded in 1949 and is headquartered in Port Washington, New York.