Why I Like MSC Industrial Direct Co., Inc. (NYSE:MSM)

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MSC Industrial Direct Co., Inc. (NYSE:MSM) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of MSM, it is a financially-sound , dividend-paying company with a great history of performance. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on MSC Industrial Direct here.

6 star dividend payer with excellent balance sheet

Over the past few years, MSM has demonstrated a proven ability to generate robust returns of 20%. Unsurprisingly, MSM surpassed the Trade Distributors industry return of 11%, which gives us more confidence of the company’s capacity to drive earnings going forward. MSM is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. MSM appears to have made good use of debt, producing operating cash levels of 0.56x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

NYSE:MSM Income Statement, July 15th 2019
NYSE:MSM Income Statement, July 15th 2019

For those seeking income streams from their portfolio, MSM is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 4.1%, making it one of the best dividend companies in the market.

NYSE:MSM Historical Dividend Yield, July 15th 2019
NYSE:MSM Historical Dividend Yield, July 15th 2019

Next Steps:

For MSC Industrial Direct, I’ve put together three important aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for MSM’s future growth? Take a look at our free research report of analyst consensus for MSM’s outlook.
  2. Valuation: What is MSM worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MSM is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of MSM? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.