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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for W.W. Grainger and Comfort Systems USA, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
W.W. Grainger 4 10 1 0 1.80
Comfort Systems USA 0 4 1 0 2.20

W.W. Grainger currently has a consensus price target of $190.92, suggesting a potential downside of 6.17%. Comfort Systems USA has a consensus price target of $63.00, suggesting a potential upside of 53.10%. Given Comfort Systems USA’s stronger consensus rating and higher probable upside, analysts plainly believe Comfort Systems USA is more favorable than W.W. Grainger.

Valuation & Earnings

This table compares W.W. Grainger and Comfort Systems USA’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
W.W. Grainger $10.14 billion 1.14 $605.92 million $8.40 24.22
Comfort Systems USA $1.63 billion 0.93 $64.89 million $1.72 23.92

W.W. Grainger has higher revenue and earnings than Comfort Systems USA. Comfort Systems USA 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.

Insider and Institutional Ownership

86.0% of W.W. Grainger shares are held by institutional investors. Comparatively, 94.2% of Comfort Systems USA shares are held by institutional investors. 9.6% of W.W. Grainger shares are held by company insiders. Comparatively, 3.5% of Comfort Systems USA shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

W.W. Grainger has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500. Comparatively, Comfort Systems USA has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.

Dividends

W.W. Grainger pays an annual dividend of $5.12 per share and has a dividend yield of 2.5%. Comfort Systems USA pays an annual dividend of $0.30 per share and has a dividend yield of 0.7%. W.W. Grainger pays out 61.0% of its earnings in the form of a dividend. Comfort Systems USA pays out 17.4% 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 increased its dividend for 4 consecutive years and Comfort Systems USA has increased its dividend for 45 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
W.W. Grainger 4.83% 34.25% 11.20%
Comfort Systems USA 3.76% 16.49% 8.14%

Summary

W.W. Grainger beats Comfort Systems USA on 9 of the 16 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.

Comfort Systems USA Company Profile

Comfort Systems USA, Inc. is a provider of mechanical contracting services, which principally includes heating, ventilation and air conditioning (HVAC), plumbing, piping and controls, as well as off-site construction, electrical, monitoring and fire protection. As of December 31, 2016, the Company installed, maintained, repaired and replaced products and systems throughout its 35 operating units in 84 cities and 91 locations throughout the United States. The Company operates primarily in the commercial, industrial and institutional HVAC markets and offers services in the industrial, healthcare, education, office, technology, retail and government facilities. The Company provides a range of construction, renovation, expansion, maintenance, repair and replacement services for mechanical and related systems in commercial, industrial and institutional properties. The Company also provides remote monitoring of temperature, pressure, humidity and air flow for HVAC systems.

Receive News & Ratings for W.W. Grainger Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for W.W. Grainger Inc. and related companies with Analyst Ratings Network's FREE daily email newsletter.