Head to Head Review: Boise Cascade (NYSE:BCC) & MSC Industrial Direct (NYSE:MSM)

MSC Industrial Direct (NYSE:MSM) and Boise Cascade (NYSE:BCC) are both mid-cap industrials companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, earnings, valuation, institutional ownership and risk.

Risk and Volatility

MSC Industrial Direct has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Boise Cascade has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Valuation and Earnings

This table compares MSC Industrial Direct and Boise Cascade”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MSC Industrial Direct	$4.01 billion	1.54	$222.59 million	$3.98	27.81
Boise Cascade	$6.59 billion	0.39	$132.84 million	$3.41	21.67

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.

Analyst Ratings

This is a summary of recent ratings and recommmendations for MSC Industrial Direct and Boise Cascade, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MSC Industrial Direct	0	2	7	1	2.90
Boise Cascade	2	4	2	0	2.00

MSC Industrial Direct currently has a consensus price target of $133.22, indicating a potential upside of 20.38%. Boise Cascade has a consensus price target of $88.17, indicating a potential upside of 19.32%. Given MSC Industrial Direct’s stronger consensus rating and higher possible upside, equities analysts plainly believe MSC Industrial Direct is more favorable than Boise Cascade.

Dividends

MSC Industrial Direct pays an annual dividend of $3.48 per share and has a dividend yield of 3.1%. 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 27.0% of its earnings in the form of a dividend. MSC Industrial Direct has raised its dividend for 3 consecutive years and Boise Cascade has raised its dividend for 6 consecutive years.

Institutional and Insider Ownership

79.3% of MSC Industrial Direct shares are owned by institutional investors. Comparatively, 96.2% of Boise Cascade shares are owned by institutional investors. 19.0% of MSC Industrial Direct shares are owned by company insiders. Comparatively, 1.4% of Boise Cascade shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

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%	6.18%	3.78%

Summary

MSC Industrial Direct beats Boise Cascade on 13 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.