Analyzing MSC Industrial Direct (NYSE:MSM) & Mitsui & Co. (OTCMKTS:MITSY)

MSC Industrial Direct (NYSE:MSM) and Mitsui & Co. (OTCMKTS:MITSY) are both industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, earnings, valuation and dividends.

Institutional & Insider Ownership

79.3% of MSC Industrial Direct shares are owned by institutional investors. 19.0% of MSC Industrial Direct shares are owned by insiders. Comparatively, 0.0% of Mitsui & Co. shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares MSC Industrial Direct and Mitsui & Co.”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MSC Industrial Direct	$3.77 billion	1.93	$199.33 million	$4.14	31.40
Mitsui & Co.	$92.97 billion	0.97	$5.21 billion	$42.41	14.86

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

Risk & Volatility

MSC Industrial Direct has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, Mitsui & Co. has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for MSC Industrial Direct and Mitsui & Co., as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MSC Industrial Direct	0	4	4	0	2.50
Mitsui & Co.	0	1	0	0	2.00

MSC Industrial Direct presently has a consensus target price of $123.43, suggesting a potential downside of 5.06%. Given MSC Industrial Direct’s stronger consensus rating and higher possible upside, equities research analysts clearly believe MSC Industrial Direct is more favorable than Mitsui & Co..

Profitability

This table compares MSC Industrial Direct and Mitsui & Co.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MSC Industrial Direct	5.91%	17.34%	9.79%
Mitsui & Co.	6.22%	10.67%	4.76%

Dividends

MSC Industrial Direct pays an annual dividend of $3.48 per share and has a dividend yield of 2.7%. Mitsui & Co. pays an annual dividend of $11.86 per share and has a dividend yield of 1.9%. MSC Industrial Direct pays out 84.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Mitsui & Co. pays out 28.0% of its earnings in the form of a dividend. MSC Industrial Direct has raised its dividend for 3 consecutive years. MSC Industrial Direct is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

MSC Industrial Direct beats Mitsui & Co. on 12 of the 17 factors compared between the two stocks.

About MSC Industrial Direct

MSC Industrial Direct Co., Inc., together with its subsidiaries, distributes metalworking and maintenance, repair, and operations (MRO) products and services in the United States, Canada, Mexico, the United Kingdom, and internationally. The company's MRO products include cutting tools, measuring instruments, tooling components, metalworking products, fasteners, flat stock products, raw materials, abrasives, machinery hand and power tools, safety and janitorial supplies, plumbing supplies, materials handling products, power transmission components, and electrical supplies. It offers stock-keeping units through its catalogs and brochures; e-commerce channels, including its website, mscdirect.com; inventory management solutions; and customer care centers, customer fulfillment centers, regional inventory centers, and warehouses. The company serves individual machine shops, manufacturing companies, and government agencies. MSC Industrial Direct Co., Inc. was founded in 1941 and is headquartered in Melville, New York.

About Mitsui & Co.

Mitsui & Co., Ltd. operates as an trading and investment company worldwide. The company engages in the manufacture and sale of steel products; steel processing, maintenance, and recycling activities; investment, development, and trading of mineral and metal resources, as well as resource recycling and industrial developing solutions; and upstream development, logistics, and trading of energy resources, such as natural gas/LNG, oil, coal, and uranium. It also offers power, gas, water, rail, and logistics systems; sales, financing, lease, transportation, and logistics services; and invests in plants, offshore energy development, ships, aviation, space, railways, and automotives, as well as machinery for mining, construction, and industrial use. In addition, the company provides basic chemicals and inorganic raw materials, functional materials, electronic materials, specialty chemicals, housing and lifestyle materials, agri-inputs, animal/human nutrition, and health products; and logistics infrastructures services, including tank terminal operation, as well as plastic recycling and next-generation energy, such as hydrogen and ammonia and forest resources businesses. Further, it engages in the food resources and products, merchandising, retail, fashion and textiles, wellness, healthcare, pharma, hospitality, and human capital businesses. Additionally, it is involved in the ICT, finance, real estate, and logistics businesses. The company was incorporated in 1947 and is headquartered in Tokyo, Japan. Mitsui E&P Italia B operates as a subsidiary of Mitsui & Co., Ltd.