Head to Head Survey: LegalZoom.com (NASDAQ:LZ) and W.W. Grainger (NYSE:GWW)

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

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LegalZoom.com	1	6	2	0	2.11
W.W. Grainger	2	7	2	0	2.00

LegalZoom.com presently has a consensus price target of $10.83, indicating a potential upside of 5.49%. W.W. Grainger has a consensus price target of $1,053.71, indicating a potential upside of 10.17%. Given W.W. Grainger’s higher probable upside, analysts clearly believe W.W. Grainger is more favorable than LegalZoom.com.

Insider & Institutional Ownership

82.0% of LegalZoom.com shares are owned by institutional investors. Comparatively, 80.7% of W.W. Grainger shares are owned by institutional investors. 5.9% of LegalZoom.com shares are owned by insiders. Comparatively, 6.1% of W.W. Grainger 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
LegalZoom.com	4.07%	20.36%	6.05%
W.W. Grainger	10.99%	49.63%	21.63%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LegalZoom.com	$681.88 million	2.71	$29.96 million	$0.16	64.19
W.W. Grainger	$17.48 billion	2.62	$1.91 billion	$39.41	24.27

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.

Risk & Volatility

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

Summary

W.W. Grainger beats LegalZoom.com on 8 of the 13 factors compared between the two stocks.

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.

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.