Lawson Products (NASDAQ: LAWS) and MRC Global (NYSE:MRC) are both small-cap industrial products companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Profitability

This table compares Lawson Products and MRC Global’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lawson Products 1.85% 2.54% 1.22%
MRC Global -1.40% 0.39% 0.13%

Analyst Recommendations

This is a summary of current recommendations for Lawson Products and MRC Global, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lawson Products 0 0 1 0 3.00
MRC Global 0 2 4 0 2.67

Lawson Products presently has a consensus price target of $25.00, indicating a potential upside of 8.81%. MRC Global has a consensus price target of $21.29, indicating a potential upside of 35.49%. Given MRC Global’s higher probable upside, analysts clearly believe MRC Global is more favorable than Lawson Products.

Risk and Volatility

Lawson Products has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500. Comparatively, MRC Global has a beta of 1.6, indicating that its share price is 60% more volatile than the S&P 500.

Insider & Institutional Ownership

65.1% of Lawson Products shares are owned by institutional investors. Comparatively, 97.0% of MRC Global shares are owned by institutional investors. 18.2% of Lawson Products shares are owned by company insiders. Comparatively, 6.3% of MRC Global shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Lawson Products and MRC Global’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Lawson Products $287.14 million 0.71 $6.80 million $0.56 41.03
MRC Global $3.30 billion 0.45 $69.00 million ($0.73) -21.52

MRC Global has higher revenue and earnings than Lawson Products. MRC Global is trading at a lower price-to-earnings ratio than Lawson Products, indicating that it is currently the more affordable of the two stocks.

Summary

Lawson Products beats MRC Global on 7 of the 13 factors compared between the two stocks.

About Lawson Products

Lawson Products, Inc. is a distributor of products and services the industrial, commercial, institutional and government maintenance, repair and operations (MRO) market. The Company’s product categories include fastening systems, fluid power, specialty chemicals, cutting tools and abrasives, electrical, aftermarket automotive supplies, safety, welding and metal repair, and other. The Company supplies a range of automotive products, including body hardware, body shop, brake/wheel, fleet/truck, repair harness assembly and other parts. The Company offers approximately 200,000 different core products for sale of which approximately 50,000 products are maintained in its distribution centers. The Company’s customers operate in a range of industries, including automotive repair, commercial vehicle maintenance, government, manufacturing, food processing, distribution, construction, oil and gas, mining, wholesale and service.

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.

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