W.W. Grainger (NYSE: GWW) and CLARCOR (NYSE:CLC) are both industrial products companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Dividends

W.W. Grainger pays an annual dividend of $5.12 per share and has a dividend yield of 3.1%. CLARCOR pays an annual dividend of $1.00 per share and has a dividend yield of 1.2%. W.W. Grainger pays out 59.1% of its earnings in the form of a dividend. CLARCOR pays out 35.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. W.W. Grainger has raised its dividend for 45 consecutive years and CLARCOR has raised its dividend for 52 consecutive years.

Institutional & Insider Ownership

80.6% of W.W. Grainger shares are owned by institutional investors. Comparatively, 86.9% of CLARCOR shares are owned by institutional investors. 9.6% of W.W. Grainger shares are owned by company insiders. Comparatively, 3.0% of CLARCOR shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares W.W. Grainger and CLARCOR’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
W.W. Grainger $10.22 billion 0.92 $1.40 billion $8.66 18.91
CLARCOR N/A N/A N/A $2.84 29.23

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

Volatility & Risk

W.W. Grainger has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, CLARCOR has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.

Profitability

This table compares W.W. Grainger and CLARCOR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
W.W. Grainger 5.08% 34.03% 11.48%
CLARCOR 7.71% 10.16% 6.66%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for W.W. Grainger and CLARCOR, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
W.W. Grainger 4 9 0 0 1.69
CLARCOR 1 2 0 0 1.67

W.W. Grainger currently has a consensus price target of $180.36, suggesting a potential upside of 10.12%. CLARCOR has a consensus price target of $73.50, suggesting a potential downside of 11.45%. Given W.W. Grainger’s stronger consensus rating and higher probable upside, equities research analysts clearly believe W.W. Grainger is more favorable than CLARCOR.

Summary

W.W. Grainger beats CLARCOR on 8 of the 13 factors compared between the two stocks.

W.W. Grainger Company Profile

W.W. Grainger, Inc. (Grainger) is a distributor of maintenance, repair and operating (MRO) supplies and other related products and services. The Company offers its products and services to businesses and institutions in the United States and Canada, with presence also in Europe, Asia and Latin America. The Company operates through two segments, which include the United States and Canada. The Company’s business support functions provide coordination and guidance in the areas of accounting and finance, business development, communications and investor relations, compensation and benefits, information systems, health and safety, global supply chain functions, human resources, risk management, internal audit, legal, real estate, security, tax and treasury. The Company’s other businesses also include Zoro Tools, Inc. (Zoro), the single channel online business in the United States, MonotaRO Co. (MonotaRO) in Japan, and operations in Europe, Asia and Latin America.

CLARCOR Company Profile

CLARCOR Inc. is engaged in providing filtration products, filtration systems and services, and consumer and industrial packaging products. The Company’s segments are Engine/Mobile Filtration and Industrial/Environmental Filtration. Its Engine/Mobile Filtration segment manufactures and sells filtration products for on-road and off-road mobile and stationary applications. Its Industrial/Environmental Filtration segment manufactures and sells filtration products used in industrial and commercial processes, and in buildings and infrastructures of various types. Its liquid process filtration products include specialty industrial process liquid filters; filters for pharmaceutical processes and beverages; filtration systems, filters and coalescers for the oil and natural gas industry; filtration systems for aircraft refueling, anti-pollution, sewage treatment and water recycling; bilge water separators, and sand control filters for oil and gas drilling.

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