Critical Analysis: MSC Industrial Direct (NYSE:MSM) & Waxman Industries (OTCMKTS:WXMN)

Waxman Industries (OTCMKTS:WXMN) and MSC Industrial Direct (NYSE:MSM) are both industrials companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Waxman Industries and MSC Industrial Direct, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waxman Industries	0	0	0	0	0.00
MSC Industrial Direct	0	3	4	1	2.75

MSC Industrial Direct has a consensus price target of $123.43, suggesting a potential upside of 3.32%. Given MSC Industrial Direct’s stronger consensus rating and higher possible upside, analysts plainly believe MSC Industrial Direct is more favorable than Waxman Industries.

Profitability

This table compares Waxman Industries and MSC Industrial Direct’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waxman Industries	N/A	N/A	N/A
MSC Industrial Direct	5.91%	17.34%	9.79%

Institutional and Insider Ownership

79.3% of MSC Industrial Direct shares are owned by institutional investors. 67.9% of Waxman Industries shares are owned by insiders. Comparatively, 19.0% of MSC Industrial Direct shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Waxman Industries and MSC Industrial Direct”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waxman Industries	N/A	N/A	N/A	N/A	N/A
MSC Industrial Direct	$3.91 billion	1.71	$199.33 million	$4.14	28.86

MSC Industrial Direct has higher revenue and earnings than Waxman Industries.

Risk & Volatility

Waxman Industries has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, MSC Industrial Direct has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500.

Summary

MSC Industrial Direct beats Waxman Industries on 9 of the 11 factors compared between the two stocks.

About Waxman Industries

Waxman Industries, Inc. designs, develops, and distributes surface protection and floor care products, and other home improvement and hardware products. The company's floor care and surface protection products include furniture sliders, felt pads, furniture tips and glides, bumpers, gripper pads, caster and cups, and door stops; shower heads and accessories; and plumping products comprise sink and faucet repair products, water leak detection products, toilet repair products, plungers, drain cleaning and repair products, water supply repair products, and hose and pipe repair products. It also offers bathroom and kitchen faucets; and home organization and storage solutions. The company sells its products under the Kleen Freak, SoftTouch, PlumCraft, Super Sliders, leakSMART, BodyMoods, and SimplyClean brand names. Waxman Industries, Inc. was incorporated in 1989 and is based in Bedford Heights, Ohio.

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.