MSC Industrial Direct (NYSE: MSM) and Albany International (NYSE:AIN) are both industrial products companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.
Institutional and Insider Ownership
75.6% of MSC Industrial Direct shares are owned by institutional investors. Comparatively, 90.7% of Albany International shares are owned by institutional investors. 31.3% of MSC Industrial Direct shares are owned by insiders. Comparatively, 11.6% of Albany International shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
MSC Industrial Direct pays an annual dividend of $1.92 per share and has a dividend yield of 1.9%. Albany International pays an annual dividend of $0.68 per share and has a dividend yield of 1.1%. MSC Industrial Direct pays out 47.5% of its earnings in the form of a dividend. Albany International pays out 51.1% 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. MSC Industrial Direct has increased its dividend for 6 consecutive years and Albany International has increased its dividend for 6 consecutive years. MSC Industrial Direct is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation and Earnings
This table compares MSC Industrial Direct and Albany International’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|MSC Industrial Direct||$2.89 billion||1.92||$231.43 million||$4.04||24.38|
|Albany International||$779.84 million||2.57||$52.73 million||$1.33||46.84|
MSC Industrial Direct has higher revenue and earnings than Albany International. MSC Industrial Direct is trading at a lower price-to-earnings ratio than Albany International, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
MSC Industrial Direct has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, Albany International has a beta of 1.73, indicating that its stock price is 73% more volatile than the S&P 500.
This is a summary of current recommendations and price targets for MSC Industrial Direct and Albany International, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|MSC Industrial Direct||1||8||4||0||2.23|
MSC Industrial Direct currently has a consensus price target of $90.82, suggesting a potential downside of 7.80%. Given MSC Industrial Direct’s higher possible upside, equities analysts clearly believe MSC Industrial Direct is more favorable than Albany International.
This table compares MSC Industrial Direct and Albany International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|MSC Industrial Direct||8.01%||19.42%||11.28%|
MSC Industrial Direct beats Albany International on 11 of the 15 factors compared between the two stocks.
MSC Industrial Direct Company Profile
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.
Albany International Company Profile
Albany International Corp. is focused on textiles and materials processing business. The Company operates through two segments: Machine Clothing and Albany Engineered Composites. The Company’s Machine Clothing segment supplies permeable and impermeable belts used in the manufacture of paper, paperboard, nonwovens, fiber cement and various other industrial applications. The Machine Clothing segment also supplies customized, consumable fabrics used in the manufacturing process in the pulp, corrugator, nonwovens, fiber cement, building products, and tannery and textile industries. Its Albany Engineered Composites segment includes Albany Safran Composites, LLC (ASC), in which its customer SAFRAN Group owns interest and provides engineered composite structures based on its technology to customers in the aerospace and defense industries.
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