Fastenal (NASDAQ:FAST) & Global Industrial (NYSE:GIC) Critical Comparison

Global Industrial (NYSE:GIC) and Fastenal (NASDAQ:FAST) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, valuation, analyst recommendations, profitability and earnings.

Institutional & Insider Ownership

31.2% of Global Industrial shares are held by institutional investors. Comparatively, 81.4% of Fastenal shares are held by institutional investors. 64.5% of Global Industrial shares are held by insiders. Comparatively, 0.3% of Fastenal 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.

Dividends

Global Industrial pays an annual dividend of $1.12 per share and has a dividend yield of 2.9%. Fastenal pays an annual dividend of $1.04 per share and has a dividend yield of 2.2%. Global Industrial pays out 50.0% of its earnings in the form of a dividend. Fastenal pays out 88.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Global Industrial has raised its dividend for 9 consecutive years and Fastenal has raised its dividend for 26 consecutive years. Global Industrial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Global Industrial has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, Fastenal has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Global Industrial and Fastenal, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Global Industrial	0	1	1	0	2.50
Fastenal	2	5	5	0	2.25

Fastenal has a consensus target price of $49.17, suggesting a potential upside of 2.58%. Given Fastenal’s higher possible upside, analysts clearly believe Fastenal is more favorable than Global Industrial.

Profitability

This table compares Global Industrial and Fastenal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Global Industrial	6.06%	21.49%	11.60%
Fastenal	15.45%	34.03%	26.16%

Earnings and Valuation

This table compares Global Industrial and Fastenal”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Global Industrial	$1.44 billion	1.04	$72.10 million	$2.24	17.46
Fastenal	$8.20 billion	6.71	$1.26 billion	$1.18	40.62

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

Summary

Fastenal beats Global Industrial on 11 of the 17 factors compared between the two stocks.

About Global Industrial

Global Industrial Company operates as an industrial distributor of various industrial and maintenance, repair, and operation (MRO) products in North America. It offers storage and shelving, safety and security, carts and trucks, HVAC and fans, furniture and decor, material handling, janitorial and facility maintenance, workbenches and shop desks, tools and instruments, plumbing and pumps, office and school supplies, packaging and shipping, lighting and electrical, foodservice and retail, medical and laboratory, motors and power transmission, building supplies, machining, fasteners and hardware, vehicle maintenance, and raw materials. The company offers industrial and MRO products under the Global, GlobalIndustrial.com, Nexel, Paramount, Interion, and Absocold trademarks. It serves businesses; state, local, and private educational organizations; and government entities through relationship marketers, e-commerce sites, signature campaigns, and catalogs. The company was formerly known as Systemax Inc. Global Industrial Company was founded in 1949 and is headquartered in Port Washington, New York.

About Fastenal

Fastenal Company, together with its subsidiaries, engages in the wholesale distribution of industrial and construction supplies in the United States, Canada, Mexico, North America, and internationally. It offers fasteners, and related industrial and construction supplies under the Fastenal name. The company’s fastener products include threaded fasteners, bolts, nuts, screws, studs, and related washers that are used in manufactured products and construction projects, as well as in the maintenance and repair of machines. It also offers miscellaneous supplies and hardware, including pins, machinery keys, concrete anchors, metal framing systems, wire ropes, strut products, rivets, and related accessories. The company serves the manufacturing market comprising original equipment manufacturers; maintenance, repair, and operations customers; non-residential construction market; farmers, truckers, railroads, mining companies, schools, and retail trades; and oil exploration, production, and refinement companies, as well as federal, state, and local governmental entities. Fastenal Company was founded in 1967 and is headquartered in Winona, Minnesota.