Head to Head Comparison: W.W. Grainger (NYSE:GWW) versus LegalZoom.com (NASDAQ:LZ)

W.W. Grainger (NYSE:GWW) and LegalZoom.com (NASDAQ:LZ) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, analyst recommendations, earnings, valuation and risk.

Institutional & Insider Ownership

80.7% of W.W. Grainger shares are held by institutional investors. Comparatively, 82.0% of LegalZoom.com shares are held by institutional investors. 6.1% of W.W. Grainger shares are held by company insiders. Comparatively, 5.9% of LegalZoom.com shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

W.W. Grainger pays an annual dividend of $9.04 per share and has a dividend yield of 0.9%. LegalZoom.com pays an annual dividend of $1.44 per share and has a dividend yield of 14.3%. W.W. Grainger pays out 25.4% of its earnings in the form of a dividend. LegalZoom.com pays out 1,200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. W.W. Grainger has increased its dividend for 55 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
W.W. Grainger	10.99%	49.63%	21.63%
LegalZoom.com	3.05%	9.91%	3.35%

Analyst Ratings

This is a summary of recent ratings and price targets for W.W. Grainger and LegalZoom.com, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
W.W. Grainger	2	5	2	0	2.00
LegalZoom.com	1	5	3	0	2.22

W.W. Grainger presently has a consensus price target of $1,061.57, indicating a potential upside of 11.08%. LegalZoom.com has a consensus price target of $11.17, indicating a potential upside of 10.56%. Given W.W. Grainger’s higher probable upside, equities analysts clearly believe W.W. Grainger is more favorable than LegalZoom.com.

Risk & Volatility

W.W. Grainger has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, LegalZoom.com has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500.

Valuation and Earnings

This table compares W.W. Grainger and LegalZoom.com”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
W.W. Grainger	$17.75 billion	2.56	$1.91 billion	$35.66	26.80
LegalZoom.com	$727.48 million	2.50	$29.96 million	$0.12	84.17

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

Summary

W.W. Grainger beats LegalZoom.com on 11 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 LegalZoom.com

LegalZoom.com, Inc., together with its subsidiaries, operates an online platform that supports the legal, compliance, and business management needs of small businesses and consumers in the United States. The company’s platform offers business formation products, such as limited liability company, incorporation of C and S corporations, nonprofit formations, doing-business-as, corporate changes and filings, business licenses, legal forms, and beneficial ownership information reports; intellectual property products consisting of trademark and patent applications, and copyright registrations; and tax services, including business and personal tax preparations. It also provides consumer, estate planning, and other services comprising last will and testament, living will, living trust, power of attorney, and name change. In addition, the company offers subscriptions services, including registered agent, compliance, attorney advice, tax advice and preparation, eSignature, virtual mail and check deposit services, trademark monitoring, and estate planning bundle. The company was incorporated in 1999 and is headquartered in Mountain View, California.