Critical Comparison: Distribution Solutions Group (NASDAQ:DSGR) & BlueLinx (NYSE:BXC)

Distribution Solutions Group (NASDAQ:DSGR) and BlueLinx (NYSE:BXC) are both small-cap industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.

Risk and Volatility

Distribution Solutions Group has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500. Comparatively, BlueLinx has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500.

Valuation and Earnings

This table compares Distribution Solutions Group and BlueLinx”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Distribution Solutions Group	$1.98 billion	0.82	$8.35 million	$0.19	184.18
BlueLinx	$2.95 billion	0.20	$220,000.00	($0.25)	-300.72

Distribution Solutions Group has higher earnings, but lower revenue than BlueLinx. BlueLinx is trading at a lower price-to-earnings ratio than Distribution Solutions Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Distribution Solutions Group and BlueLinx, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Distribution Solutions Group	0	4	0	0	2.00
BlueLinx	1	3	1	0	2.00

Distribution Solutions Group presently has a consensus price target of $35.00, indicating a potential upside of 0.01%. BlueLinx has a consensus price target of $83.50, indicating a potential upside of 11.07%. Given BlueLinx’s higher possible upside, analysts plainly believe BlueLinx is more favorable than Distribution Solutions Group.

Insider and Institutional Ownership

91.6% of Distribution Solutions Group shares are held by institutional investors. Comparatively, 90.8% of BlueLinx shares are held by institutional investors. 78.8% of Distribution Solutions Group shares are held by company insiders. Comparatively, 3.6% of BlueLinx shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Distribution Solutions Group and BlueLinx’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Distribution Solutions Group	0.44%	9.33%	3.41%
BlueLinx	-0.06%	0.13%	0.05%

Summary

Distribution Solutions Group beats BlueLinx on 9 of the 13 factors compared between the two stocks.

About Distribution Solutions Group

Distribution Solutions Group, Inc., a specialty distribution company, engages in the provision of value-added distribution solutions in North America, Europe, Asia, South America, and the Middle East. The company provides its solutions to the maintenance, repair, and operations (MRO); original equipment manufacturer (OEM); and industrial technology markets. It operates through three segments: Lawson, Gexpro Services, and TestEquity. The Lawson segment distributes of specialty products and services to the industrial, commercial, institutional, and government MRO market. The TestEquity segment distributes test and measurement equipment and solutions, industrial and electronic production supplies, and vendor managed inventory programs, as well as converting, fabrication, and adhesive solutions under the TestEquity, Hisco, TEquipment, Techni-Tool, Jensen Tools, and Instrumex brands. The Gexpro Services segment provides supply chain management solutions that offer VMI, kitting, global logistics management, manufacturing localization and import expertise, value engineering, and quality assurance. The company was formerly known as Lawson Products, Inc. and has changed to Distribution Solutions Group, Inc. 2022 Distribution Solutions Group, Inc. was incorporated in 1952 and is headquartered in Fort Worth, Texas.

About BlueLinx

BlueLinx Holdings Inc., together with its subsidiaries, engages in the distribution of residential and commercial building products in the United States. It distributes specialty products, including engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products; and structural products, such as lumber, plywood, oriented strand boards, rebars and remesh, as well as other wood products that are used for structural support in construction projects. It also provides various value-added services and solutions to customers and suppliers. The company serves national home centers, pro dealers, cooperatives, specialty distributors, regional and local dealers, and industrial manufacturers. BlueLinx Holdings Inc. was incorporated in 2004 and is headquartered in Marietta, Georgia.