Analyzing MRC Global (MRC) and DXP Enterprises (DXPE)
MRC Global (NYSE: MRC) and DXP Enterprises (NASDAQ:DXPE) are both small-cap industrial products companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, profitabiliy, institutional ownership and earnings.
Insider & Institutional Ownership
97.0% of MRC Global shares are held by institutional investors. Comparatively, 73.8% of DXP Enterprises shares are held by institutional investors. 6.3% of MRC Global shares are held by insiders. Comparatively, 9.6% of DXP Enterprises 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.
This is a summary of recent recommendations and price targets for MRC Global and DXP Enterprises, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
MRC Global currently has a consensus price target of $21.29, indicating a potential upside of 35.75%. DXP Enterprises has a consensus price target of $41.00, indicating a potential upside of 44.21%. Given DXP Enterprises’ higher possible upside, analysts clearly believe DXP Enterprises is more favorable than MRC Global.
This table compares MRC Global and DXP Enterprises’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk and Volatility
MRC Global has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500. Comparatively, DXP Enterprises has a beta of 2.63, meaning that its share price is 163% more volatile than the S&P 500.
Earnings and Valuation
This table compares MRC Global and DXP Enterprises’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|MRC Global||$3.12 billion||0.47||$45.00 million||($0.73)||-21.48|
|DXP Enterprises||$941.54 million||0.53||$59.70 million||$0.84||33.85|
DXP Enterprises has higher revenue, but lower earnings than MRC Global. MRC Global is trading at a lower price-to-earnings ratio than DXP Enterprises, indicating that it is currently the more affordable of the two stocks.
DXP Enterprises beats MRC Global on 9 of the 13 factors compared between the two stocks.
About MRC Global
MRC Global Inc. is an industrial distributor of pipe, valves and fittings and related products and services to the energy industry. The Company’s segments include the U.S., Canada and International. Its U.S. segment includes the United States Eastern Region and Gulf Coast, and the United States Western Region. It provides services, such as product testing, manufacturer assessments, daily deliveries, volume purchasing, inventory and zone store management and warehousing, technical support, training, just-in-time delivery, truck stocking, order consolidation, product tagging and system interfaces customized to customer and supplier specifications for tracking and replenishing inventory, engineering of control packages, and valve inspection and repair. The Company’s principal product types include valves, automation, measurement and instrumentation; carbon steel fittings and flanges; stainless steel and alloy fittings, flanges and pipe; gas products; line pipe, and other.
About DXP Enterprises
DXP Enterprises, Inc. (DXP) is engaged in the business of distributing maintenance, repair and operating (MRO) products, equipment and service to industrial customers. The Company operates through three segments: Service Centers, Supply Chain Services and Innovative Pumping Solutions. The Service Centers segment provides MRO products, equipment and services, including technical expertise and logistics capabilities to industrial customers. The Supply Chain Services segment manages all or part of a customer’s supply chain, including procurement and inventory management. The Innovative Pumping Solutions segment provides source for engineering, systems design and fabrication. It operates from approximately 190 locations in over 40 states in the United States, approximately 10 provinces in Canada, Dubai and one state in Mexico. The Company’s product categories include rotating equipment, bearings & power transmission, industrial supplies, metal working and safety products & services.
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