Financial Review: MSC Industrial Direct (NYSE:MSM) & Boise Cascade (NYSE:BCC)
by Mitch Edgeman · The Markets DailyMSC Industrial Direct (NYSE:MSM – Get Free Report) and Boise Cascade (NYSE:BCC – Get Free Report) are both mid-cap industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, valuation, dividends, institutional ownership, profitability and risk.
Profitability
This table compares MSC Industrial Direct and Boise Cascade’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| MSC Industrial Direct | 5.55% | 18.72% | 10.57% |
| Boise Cascade | 1.83% | 6.20% | 3.80% |
Analyst Recommendations
This is a summary of recent ratings and price targets for MSC Industrial Direct and Boise Cascade, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| MSC Industrial Direct | 0 | 2 | 7 | 1 | 2.90 |
| Boise Cascade | 1 | 4 | 3 | 0 | 2.25 |
MSC Industrial Direct presently has a consensus price target of $133.22, suggesting a potential upside of 10.82%. Boise Cascade has a consensus price target of $92.00, suggesting a potential upside of 22.65%. Given Boise Cascade’s higher possible upside, analysts clearly believe Boise Cascade is more favorable than MSC Industrial Direct.
Earnings and Valuation
This table compares MSC Industrial Direct and Boise Cascade”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| MSC Industrial Direct | $4.01 billion | 1.67 | $222.59 million | $3.98 | 30.21 |
| Boise Cascade | $6.40 billion | 0.41 | $132.84 million | $2.95 | 25.43 |
MSC Industrial Direct has higher earnings, but lower revenue than Boise Cascade. Boise Cascade is trading at a lower price-to-earnings ratio than MSC Industrial Direct, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
MSC Industrial Direct has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, Boise Cascade has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.
Dividends
MSC Industrial Direct pays an annual dividend of $3.48 per share and has a dividend yield of 2.9%. Boise Cascade pays an annual dividend of $0.92 per share and has a dividend yield of 1.2%. MSC Industrial Direct pays out 87.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Boise Cascade pays out 31.2% of its earnings in the form of a dividend. MSC Industrial Direct has increased its dividend for 3 consecutive years and Boise Cascade has increased its dividend for 6 consecutive years.
Insider & Institutional Ownership
79.3% of MSC Industrial Direct shares are held by institutional investors. Comparatively, 96.2% of Boise Cascade shares are held by institutional investors. 19.0% of MSC Industrial Direct shares are held by insiders. Comparatively, 1.4% of Boise Cascade shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Summary
MSC Industrial Direct beats Boise Cascade on 12 of the 18 factors compared between the two stocks.
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.
About Boise Cascade
Boise Cascade Company engages in manufacture of wood products and distribution of building materials in the United States and Canada. It operates through two segments, Wood Products and Building Materials Distribution. The Wood Products segment manufactures laminated veneer lumber and laminated beams used in headers and beams; I-joists for residential and commercial flooring and roofing systems, and other structural applications; structural, appearance, and industrial plywood panels; and ponderosa pine shop lumber and appearance grade boards. The Building Materials Distribution segment distributes a line of building materials, including oriented strand boards, plywood, and lumber; general line items, such as siding, composite decking, doors, metal products, insulation, and roofing; and engineered wood products. It markets and sells its products to dealers, home improvement centers, wholesalers, specialty distributors, and industrial converters for use in the construction of new residential housing, repair-and-remodeling of existing housing, construction of light industrial and commercial buildings, and other industrial applications. Boise Cascade Company was incorporated in 2004 and is headquartered in Boise, Idaho.