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MSC Industrial Direct Co Inc Class A MSM

Morningstar Rating
$100.94 +0.19 (0.19%)
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Company Report

We Think the Near Term Will Be Challenging for MSC, but Our Long-Term Thesis Is Intact

Since its initial public offering in late 1995, MSC Industrial Direct has increased its top line at an impressive 11% compound annual rate. Over the past 25 years, MSC has become one of the largest industrial distributors in United States and is especially well known in the metalworking industry, where we estimate it enjoys approximately 10% market share. MSC has historically been a conservatively capitalized company, but it is not afraid to flex its balance sheet when the right opportunity presents itself. The company spent $900 million to acquire J&L Industrial Supply in 2006 and Barnes' North America distribution business in 2013, which bolstered its metalworking and inventory-management products and services. In our view, these acquisitions were prudent uses of capital that improved MSC’s competitive standing.

Price vs Fair Value

MSM is trading at a 8% discount.
Price
$100.75
Fair Value
$655.00
Uncertainty
Medium
1-Star Price
$677.96
5-Star Price
$58.10
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

As end-market demand improves, MSC could return to mid- to high-single-digit sales growth and high-teens returns on invested capital.

Bears

MSC could continue to face gross margin pressure against a backdrop of soft demand and fierce competition.

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News

Trading Information

Previous Close Price
$100.75
Day Range
$99.84101.09
52-Week Range
$77.99105.77
Bid/Ask
$100.55 / $101.43
Market Cap
$5.69 Bil
Volume/Avg
493,734 / 417,201

Key Statistics

Price/Earnings (Normalized)
16.57
Price/Sales
1.42
Dividend Yield (Trailing)
3.21%
Dividend Yield (Forward)
3.29%
Total Yield
8.98%

Company Profile

MSC Industrial Direct is one of the largest industrial distributors with a focus on metalworking and maintenance, repair, and operations products and services. The company offers over 2 million products through its distribution network, which has 11 fulfillment centers. Although MSC has a presence in Canada, Mexico, and the United Kingdom, it primarily operates in the United States. In fiscal 2023, 95% of the firm’s $4.0 billion of sales was generated in the U.S.
Sector
Industrials
Industry
Industrial Distribution
Stock Style Box
Small Core
Total Number of Employees
7,377

Competitors

Valuation

Metric
MSM
WCC
GWW
Price/Earnings (Normalized)
16.5710.0026.64
Price/Book Value
4.161.4815.43
Price/Sales
1.420.342.96
Price/Cash Flow
12.277.6221.36
Price/Earnings
MSM
WCC
GWW

Financial Strength

Metric
MSM
WCC
GWW
Quick Ratio
0.701.361.56
Current Ratio
2.022.482.88
Interest Coverage
21.943.5527.88
Quick Ratio
MSM
WCC
GWW

Profitability

Metric
MSM
WCC
GWW
Return on Assets (Normalized)
13.31%5.08%23.29%
Return on Equity (Normalized)
23.86%16.06%64.65%
Return on Invested Capital (Normalized)
17.26%9.88%32.58%
Return on Assets
MSM
WCC
GWW
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WCC
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