Morningstar

MSC Industrial Direct Co Inc Class A MSM

Morningstar Rating
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Stock XNYS Rating as of
$83.40 −0.11 (0.13%)
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As of Delayed Price Post-Trading: $82.78 −0.62

Company Report

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MSC Faces Near-Term Challenges but Stronger Profit Margins Are on the Horizon

Brian Bernard

Since its initial public offering in late 1995, MSC Industrial has increased its top line at an impressive 11% compound annual rate. Over the past 25 years, MSC has become one of the largest industrial distributors in United States and is especially well known in the metalworking industry, where we estimate it enjoys approximately 10% market share. MSC has historically been a conservatively capitalized company, but it is not afraid to flex its balance sheet when the right opportunity presents itself. The company spent $900 million to acquire J&L Industrial Supply in 2006 and Barnes' North America distribution business in 2013, which bolstered its metalworking and inventory-management products and services.

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Price vs Fair Value

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MSM is trading at a 818% premium.
Price
$83.51
Fair Value
$86.00
Uncertainty
Medium
1-Star Price
$771.28
5-Star Price
$17.50
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

As end-market demand improves, MSC could return to mid- to high-single-digit sales growth and high-teens returns on invested capital.

Bears

MSC could continue to face gross margin pressure against a backdrop of soft demand, fierce competition, and execution issues.

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News

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Trading Information

Previous Close Price
$83.51
Day Range
$83.05–84.84
52-Week Range
$75.05–105.77
Bid/Ask
$82.81 / $83.81
Market Cap
$4.68 Bil
Volume/Avg
383,352 / 606,913

Key Statistics

Price/Earnings (Normalized)
15.46
Price/Sales
1.21
Dividend Yield (Trailing)
3.98%
Dividend Yield (Forward)
3.98%
Total Yield
11.61%

Company Profile

MSC Industrial Direct is one of the largest industrial distributors with a focus on metalworking and maintenance, repair, and operations products and services. The company offers over 2 million products through its distribution network, which has 11 fulfillment centers. Although MSC has a presence in Canada, Mexico, and the United Kingdom, it primarily operates in the United States. In fiscal 2023, 95% of the firm’s $4.0 billion of sales was generated in the US.
Sector
Industrials
Industry
Industrial Distribution
Stock Style Box
Small Core
Total Number of Employees
7,377
Website
https://www.mscdirect.com

Competitors

Valuation

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Metric
MSM
GWW
FAST
Price/Earnings (Normalized)
 15.4627.7635.30
Price/Book Value
 3.3515.3511.58
Price/Sales
 1.213.045.47
Price/Cash Flow
 11.5221.8930.71
Price/Earnings
MSM
GWW
FAST

Financial Strength

Metric
MSM
GWW
FAST
Quick Ratio
 0.761.302.04
Current Ratio
 2.082.304.39
Interest Coverage
 17.0529.88194.56
Quick Ratio
MSM
GWW
FAST

Profitability

Metric
MSM
GWW
FAST
Return on Assets (Normalized)
 12.17%23.64%25.37%
Return on Equity (Normalized)
 21.36%62.16%33.74%
Return on Invested Capital (Normalized)
 16.07%32.57%29.19%
Return on Assets
MSM
GWW
FAST

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