W W Grainger (NYSE: GWW) and Proto Labs (NYSE:PRLB) are both mid-cap industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, risk, earnings, profitability, valuation, dividends and institutional ownership.

Profitability

This table compares W W Grainger and Proto Labs’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
W W Grainger 4.83% 34.25% 11.20%
Proto Labs 14.53% 11.63% 10.54%

Valuation & Earnings

This table compares W W Grainger and Proto Labs’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
W W Grainger $10.14 billion 1.30 $605.92 million $8.43 27.50
Proto Labs $298.05 million 9.71 $42.70 million $1.76 61.70

W W Grainger has higher revenue and earnings than Proto Labs. W W Grainger is trading at a lower price-to-earnings ratio than Proto Labs, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

W W Grainger has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500. Comparatively, Proto Labs has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.

Dividends

W W Grainger pays an annual dividend of $5.12 per share and has a dividend yield of 2.2%. Proto Labs does not pay a dividend. W W Grainger pays out 60.7% of its earnings in the form of a dividend. Proto Labs has increased its dividend for 46 consecutive years.

Analyst Ratings

This is a summary of current ratings and target prices for W W Grainger and Proto Labs, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
W W Grainger 4 11 1 0 1.81
Proto Labs 0 3 0 0 2.00

W W Grainger presently has a consensus price target of $195.83, indicating a potential downside of 15.52%. Proto Labs has a consensus price target of $73.67, indicating a potential downside of 32.17%. Given W W Grainger’s higher probable upside, equities analysts plainly believe W W Grainger is more favorable than Proto Labs.

Insider & Institutional Ownership

85.1% of W W Grainger shares are owned by institutional investors. 9.6% of W W Grainger shares are owned by insiders. Comparatively, 7.8% of Proto Labs shares are owned by 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.

Summary

W W Grainger beats Proto Labs on 10 of the 17 factors compared between the two stocks.

W W Grainger Company Profile

W.W. Grainger, Inc. (Grainger) is a distributor of maintenance, repair and operating (MRO) supplies and other related products and services. The Company offers its products and services to businesses and institutions in the United States and Canada, with presence also in Europe, Asia and Latin America. The Company operates through two segments, which include the United States and Canada. The Company’s business support functions provide coordination and guidance in the areas of accounting and finance, business development, communications and investor relations, compensation and benefits, information systems, health and safety, global supply chain functions, human resources, risk management, internal audit, legal, real estate, security, tax and treasury. The Company’s other businesses also include Zoro Tools, Inc. (Zoro), the single channel online business in the United States, MonotaRO Co. (MonotaRO) in Japan, and operations in Europe, Asia and Latin America.

Proto Labs Company Profile

Proto Labs, Inc. is an e-commerce driven digital manufacturer of on-demand three dimensional (3D) printed, computer numerical control (CNC) machined and injection-molded custom parts for prototyping and short-run production. The Company’s geographic segments include the United States, Europe and Japan. The Company targets its products to the product developers and engineers who use 3D computer-aided design (3D CAD) software to design products across a range of end markets. Its product lines include Injection Molding, CNC Machining and 3D Printing. Its Injection Molding product line is used for prototype, on-demand and short-run production. Its CNC Machining product line uses commercially available CNC machines to cut plastic or metal blocks into one or more custom parts. Its 3D Printing product line includes stereolithography (SL), selective laser sintering (SLS) and direct metal laser sintering (DMLS) processes. The Company also provides low-volume sheet metal fabrication services.

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