W W Grainger (GWW) and Welbilt (WBT) Critical Comparison

W W Grainger (NYSE: GWW) and Welbilt (NYSE:WBT) are both industrial products companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Insider and Institutional Ownership

85.8% of W W Grainger shares are held by institutional investors. Comparatively, 91.3% of Welbilt shares are held by institutional investors. 9.6% of W W Grainger shares are held by insiders. Comparatively, 0.7% of Welbilt shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares W W Grainger and Welbilt’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
W W Grainger $10.42 billion 1.43 $585.73 million $10.02 26.33
Welbilt $1.46 billion 2.02 $79.50 million $0.64 32.98

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

Volatility & Risk

W W Grainger has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, Welbilt has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
W W Grainger 5.62% 35.76% 11.51%
Welbilt 6.14% -2,645.52% 5.23%

Dividends

W W Grainger pays an annual dividend of $5.12 per share and has a dividend yield of 1.9%. Welbilt does not pay a dividend. W W Grainger pays out 51.1% of its earnings in the form of a dividend. Welbilt has raised its dividend for 46 consecutive years.

Analyst Recommendations

This is a summary of current recommendations for W W Grainger and Welbilt, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
W W Grainger 4 10 2 0 1.88
Welbilt 0 3 4 0 2.57

W W Grainger presently has a consensus price target of $228.45, indicating a potential downside of 14.45%. Welbilt has a consensus price target of $24.20, indicating a potential upside of 14.53%. Given Welbilt’s stronger consensus rating and higher probable upside, analysts clearly believe Welbilt is more favorable than W W Grainger.

Summary

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

About W W Grainger

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.

About Welbilt

Welbilt, Inc., formerly Manitowoc Foodservice, Inc., is a commercial foodservice equipment company. The Company designs, manufactures and supplies food and beverage equipment for the global commercial foodservice market, offering customers operator and patron insights, kitchen solutions, culinary expertise, and implementation support and service. It operates through three segments: Americas, EMEA and APAC. The Americas segment includes the United States, Canada and Latin America. The EMEA segment consists of markets in Europe, Middle East and Africa, including Russia and the commonwealth of independent states. The APAC segment consists of markets in China, Singapore, Australia, India, Malaysia, Indonesia, Thailand and the Philippines. It supplies foodservice equipment to commercial and institutional foodservice operators. Its brands include Cleveland, Convotherm, Delfield, fitKitchen, Frymaster, Garland, Kolpak, Lincoln, Manitowoc Ice, Merco, Merrychef and Multiplex.

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