Contrasting W.W. Grainger (GWW) and SPX Corporation (SPXC)
W.W. Grainger (NYSE: GWW) and SPX Corporation (NYSE:SPXC) are both industrial products companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.
W.W. Grainger pays an annual dividend of $5.12 per share and has a dividend yield of 3.1%. SPX Corporation does not pay a dividend. W.W. Grainger pays out 59.1% of its earnings in the form of a dividend. W.W. Grainger has raised its dividend for 45 consecutive years.
Risk & Volatility
W.W. Grainger has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, SPX Corporation has a beta of 1.62, indicating that its stock price is 62% more volatile than the S&P 500.
Valuation and Earnings
This table compares W.W. Grainger and SPX Corporation’s 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|
|SPX Corporation||$1.43 billion||0.73||$88.70 million||($1.83)||-13.43|
W.W. Grainger has higher revenue and earnings than SPX Corporation. SPX Corporation is trading at a lower price-to-earnings ratio than W.W. Grainger, indicating that it is currently the more affordable of the two stocks.
This table compares W.W. Grainger and SPX Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
80.6% of W.W. Grainger shares are held by institutional investors. Comparatively, 85.4% of SPX Corporation shares are held by institutional investors. 9.6% of W.W. Grainger shares are held by company insiders. Comparatively, 0.6% of SPX Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This is a breakdown of recent recommendations and price targets for W.W. Grainger and SPX Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
W.W. Grainger presently has a consensus price target of $180.36, suggesting a potential upside of 10.12%. Given W.W. Grainger’s higher possible upside, analysts plainly believe W.W. Grainger is more favorable than SPX Corporation.
W.W. Grainger beats SPX Corporation on 11 of the 14 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.
SPX Corporation Company Profile
SPX Corporation is a global supplier of infrastructure equipment. The Company operates through three segments: HVAC; Detection and Measurement, and Engineered Solutions. The HVAC solutions offered by its businesses include package cooling towers, residential and commercial boilers, heating and ventilation products. Its detection and measurement product lines encompass underground pipe and cable locators, and inspection equipment. Within its power platform, it is a manufacturer of medium and large power transformers, as well as equipment for various types of power plant, including cooling equipment, heat exchangers and pollution control systems. As of December 31, 2016, the Company had operations in approximately 15 countries.
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