Head to Head Contrast: Andritz (OTCMKTS:ADRZY) versus MSC Industrial Direct (NYSE:MSM)

Andritz (OTCMKTS:ADRZY) and MSC Industrial Direct (NYSE:MSM) are both mid-cap industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.

Volatility and Risk

Andritz has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, MSC Industrial Direct has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Andritz	5.84%	20.50%	5.64%
MSC Industrial Direct	5.29%	15.21%	8.50%

Insider and Institutional Ownership

79.3% of MSC Industrial Direct shares are held by institutional investors. 18.3% of MSC Industrial Direct shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Andritz pays an annual dividend of $0.35 per share and has a dividend yield of 2.3%. MSC Industrial Direct pays an annual dividend of $3.48 per share and has a dividend yield of 4.0%. Andritz pays out 34.0% of its earnings in the form of a dividend. MSC Industrial Direct pays out 97.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MSC Industrial Direct has raised its dividend for 3 consecutive years. MSC Industrial Direct is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Andritz and MSC Industrial Direct”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Andritz	$9.00 billion	0.87	$537.26 million	$1.03	14.63
MSC Industrial Direct	$3.77 billion	1.28	$199.33 million	$3.56	24.35

Andritz has higher revenue and earnings than MSC Industrial Direct. Andritz 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.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Andritz and MSC Industrial Direct, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Andritz	0	1	1	0	2.50
MSC Industrial Direct	0	6	1	0	2.14

MSC Industrial Direct has a consensus price target of $91.50, suggesting a potential upside of 5.55%. Given MSC Industrial Direct’s higher possible upside, analysts plainly believe MSC Industrial Direct is more favorable than Andritz.

Summary

MSC Industrial Direct beats Andritz on 9 of the 16 factors compared between the two stocks.

About Andritz

Andritz AG provides plants, equipment, and services for pulp and paper industry, metalworking and steel industries, hydropower stations, and solid/liquid separation in the municipal and industrial sectors in Europe, North America, South America, China, Asia, and internationally. It operates through four segments: Pulp & Paper, Metals, Hydro, and Separation. The Pulp & Paper segment supplies technology, automation, and service solutions to produce pulp, paper, board, and tissue; boilers for power generation; flue gas cleaning systems; nonwovens technologies; panelboard production systems; and recycling, shredding, and energy solutions for various waste materials. The Metals segment provides technologies, plants, and digital solutions, including automation and software solutions, and process know-how and services; and solutions for the production and processing of flat products for welding systems and industrial furnaces, as well as services for the metals processing industry. The Hydro segment supplies electromechanical equipment and services for hydropower plants; offers plant diagnosis, refurbishment, modernization, and upgradation of existing hydropower plants; and pumps for irrigation, water supply, and flood control, as well as turbo generators. The Separation segment offers mechanical and thermal technologies, as well as services and related automation solutions for solid/liquid separation to serve chemical, environmental, food, mining, and minerals industries; and technologies and services to produce animal feed and biomass pellets. The company was founded in 1852 and is headquartered in Graz, Austria.

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.