Comparing Reliance (NYSE:RS) and W.W. Grainger (NYSE:GWW)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
W.W. Grainger	9.92%	48.73%	22.40%
Reliance	5.65%	12.51%	8.47%

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
W.W. Grainger	1	7	2	0	2.10
Reliance	1	5	2	1	2.33

W.W. Grainger presently has a consensus target price of $1,285.00, suggesting a potential upside of 0.70%. Reliance has a consensus target price of $380.33, suggesting a potential downside of 5.24%. Given W.W. Grainger’s higher probable upside, equities research analysts clearly believe W.W. Grainger is more favorable than Reliance.

Insider & Institutional Ownership

80.7% of W.W. Grainger shares are owned by institutional investors. Comparatively, 79.3% of Reliance shares are owned by institutional investors. 6.3% of W.W. Grainger shares are owned by company insiders. Comparatively, 0.4% of Reliance shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

W.W. Grainger pays an annual dividend of $9.96 per share and has a dividend yield of 0.8%. Reliance pays an annual dividend of $5.00 per share and has a dividend yield of 1.2%. W.W. Grainger pays out 25.4% of its earnings in the form of a dividend. Reliance pays out 29.1% 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 Reliance has raised its dividend for 15 consecutive years.

Volatility & Risk

W.W. Grainger has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, Reliance has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500.

Valuation and Earnings

This table compares W.W. Grainger and Reliance”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
W.W. Grainger	$17.94 billion	3.35	$1.71 billion	$39.22	32.54
Reliance	$14.29 billion	1.43	$739.40 million	$17.20	23.34

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

Summary

W.W. Grainger beats Reliance on 14 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 Reliance

Reliance, Inc. operates as a diversified metal solutions provider and the metals service center company in the United States, Canada, and internationally. The company distributes a line of approximately 100,000 metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium, and specialty steel products; and provides metals processing services to general manufacturing, non-residential construction, transportation, aerospace, energy, electronics and semiconductor fabrication, and heavy industries. It sells its products directly to original equipment manufacturers, which primarily include small machine shops and fabricators. The company was formerly known as Reliance Steel & Aluminum Co. and changed its name to Reliance, Inc. in February 2024. Reliance, Inc. was founded in 1939 and is based in Scottsdale, Arizona.