Financial Comparison: MSC Industrial Direct (MSM) & Standex International Corporation (NYSE:SXI)

Standex International Corporation (NYSE: SXI) and MSC Industrial Direct (NYSE:MSM) are both industrial products companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitabiliy, analyst recommendations, dividends, institutional ownership, valuation and risk.

Earnings and Valuation

This table compares Standex International Corporation and MSC Industrial Direct’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Standex International Corporation $731.94 million 1.63 $95.03 million $3.44 27.19
MSC Industrial Direct $2.88 billion 1.10 $443.59 million $3.99 17.57

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

Profitability

This table compares Standex International Corporation and MSC Industrial Direct’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Standex International Corporation 6.01% 14.88% 7.66%
MSC Industrial Direct 8.07% 20.05% 11.38%

Dividends

Standex International Corporation pays an annual dividend of $0.64 per share and has a dividend yield of 0.7%. MSC Industrial Direct pays an annual dividend of $1.80 per share and has a dividend yield of 2.6%. Standex International Corporation pays out 18.6% of its earnings in the form of a dividend. MSC Industrial Direct pays out 45.1% 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. Standex International Corporation has increased its dividend for 7 consecutive years and MSC Industrial Direct has increased its dividend for 6 consecutive years.

Institutional & Insider Ownership

89.0% of Standex International Corporation shares are held by institutional investors. Comparatively, 76.8% of MSC Industrial Direct shares are held by institutional investors. 2.1% of Standex International Corporation shares are held by insiders. Comparatively, 31.3% of MSC Industrial Direct shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Standex International Corporation has a beta of 1.54, indicating that its share price is 54% more volatile than the S&P 500. Comparatively, MSC Industrial Direct has a beta of 0.5, indicating that its share price is 50% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Standex International Corporation and MSC Industrial Direct, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Standex International Corporation 0 1 2 0 2.67
MSC Industrial Direct 1 10 4 0 2.20

Standex International Corporation presently has a consensus price target of $115.00, suggesting a potential upside of 22.93%. MSC Industrial Direct has a consensus price target of $90.17, suggesting a potential upside of 28.59%. Given MSC Industrial Direct’s higher possible upside, analysts clearly believe MSC Industrial Direct is more favorable than Standex International Corporation.

Summary

MSC Industrial Direct beats Standex International Corporation on 10 of the 17 factors compared between the two stocks.

About Standex International Corporation

Standex International Corporation is a diversified manufacturing company. The Company is a manufacturer of a range of products and services for diverse commercial and industrial market segments. The Company has 11 operating segments, aggregated and organized into five segments: Food Service Equipment, Engraving, Engineering Technologies, Electronics and Hydraulics. The Food Service Equipment business consists of Refrigeration Solutions group, Cooking Solutions group and Specialty Solutions group. The Engraving segment’s product lines include Mold-Tech and Innovent. The Engineering Technologies segment provides engineered parts in all workable metal alloys using various forming processes. The Electronics segment is a manufacturer of custom magnetic sensing and power conversion components and assemblies. The Hydraulics segment is a manufacturer of mobile hydraulic cylinders, including single or double acting telescopic, and piston rod hydraulic cylinders.

About MSC Industrial Direct

MSC Industrial Direct Co., Inc. is a North American distributor of metalworking and maintenance, repair and operations (MRO) products and services. The Company’s range of MRO products include cutting tools, measuring instruments, tooling components, metalworking products, fasteners, flat stock, raw materials, abrasives, machinery hand and power tools, safety and janitorial supplies, plumbing supplies, materials handling products, power transmission components and electrical supplies. The Company serves a range of customers throughout the United States, Canada and the United Kingdom, from individual machine shops, to manufacturing companies, to government agencies, such as the General Services Administration and the Department of Defense. The Company also serves durable and non-durable goods manufacturing, education and healthcare markets, among others. As of September 3, 2016, the Company had operated a network of 12 customer fulfillment centers.

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