NYSE:WCC

Stock Analysis Report

Executive Summary

WESCO International, Inc. distributes electrical, industrial, and communications maintenance, repair and operating (MRO) and original equipment manufacturers products and construction materials in North America and internationally.

Rewards

Trading at 30.8% below its fair value

Earnings are forecast to grow 7.05% per year

Earnings grew by 19.1% over the past year

Risk Analysis

Debt is not well covered by operating cash flow



Snowflake Analysis

Undervalued with proven track record.


Similar Companies

Share Price & News

How has WESCO International's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: WCC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

8.0%

WCC

2.6%

US Trade Distributors

0.8%

US Market


1 Year Return

11.7%

WCC

22.8%

US Trade Distributors

17.8%

US Market

Return vs Industry: WCC underperformed the US Trade Distributors industry which returned 22.8% over the past year.

Return vs Market: WCC underperformed the US Market which returned 17.8% over the past year.


Shareholder returns

WCCIndustryMarket
7 Day8.0%2.6%0.8%
30 Day2.9%-0.6%1.8%
90 Day14.7%8.2%4.1%
1 Year11.7%11.7%25.1%22.8%20.4%17.8%
3 Year-18.4%-18.4%31.2%25.6%45.9%36.4%
5 Year-24.1%-24.1%44.0%33.7%68.1%49.6%

Price Volatility Vs. Market

How volatile is WESCO International's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is WESCO International undervalued compared to its fair value and its price relative to the market?

30.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: WCC ($56.05) is trading below our estimate of fair value ($81.05)

Significantly Below Fair Value: WCC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: WCC is good value based on its PE Ratio (10.8x) compared to the Trade Distributors industry average (18x).

PE vs Market: WCC is good value based on its PE Ratio (10.8x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: WCC is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: WCC is good value based on its PB Ratio (1.1x) compared to the US Trade Distributors industry average (1.7x).


Next Steps

Future Growth

How is WESCO International forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

7.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WCC's forecast earnings growth (7.1% per year) is above the savings rate (1.7%).

Earnings vs Market: WCC's earnings (7.1% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: WCC's earnings are forecast to grow, but not significantly.

Revenue vs Market: WCC's revenue (2.3% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: WCC's revenue (2.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WCC's Return on Equity is forecast to be low in 3 years time (9.6%).


Next Steps

Past Performance

How has WESCO International performed over the past 5 years?

-4.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: WCC has high quality earnings.

Growing Profit Margin: WCC's current net profit margins (2.8%) are higher than last year (2.3%).


Past Earnings Growth Analysis

Earnings Trend: WCC's earnings have declined by -4.6% per year over the past 5 years.

Accelerating Growth: WCC's earnings growth over the past year (19.1%) exceeds its 5-year average (-4.6% per year).

Earnings vs Industry: WCC earnings growth over the past year (19.1%) exceeded the Trade Distributors industry -8.5%.


Return on Equity

High ROE: WCC's Return on Equity (10.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is WESCO International's financial position?


Financial Position Analysis

Short Term Liabilities: WCC's short term assets ($2.6B) exceed its short term liabilities ($1.1B).

Long Term Liabilities: WCC's short term assets ($2.6B) exceed its long term liabilities ($1.8B).


Debt to Equity History and Analysis

Debt Level: WCC's debt to equity ratio (63.6%) is considered high.

Reducing Debt: WCC's debt to equity ratio has reduced from 79.4% to 63.6% over the past 5 years.

Debt Coverage: WCC's debt is not well covered by operating cash flow (17.2%).

Interest Coverage: WCC's interest payments on its debt are well covered by EBIT (5.3x coverage).


Balance Sheet

Inventory Level: WCC has a high level of physical assets or inventory.

Debt Coverage by Assets: WCC's debt is covered by short term assets (assets are 1.9x debt).


Next Steps

Dividend

What is WESCO International's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage2.6%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate WCC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate WCC's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if WCC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if WCC's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of WCC's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of WESCO International's salary, the management and board of directors tenure and is there insider trading?

3.9yrs

Average management tenure


CEO

John Engel (57yo)

10.3yrs

Tenure

US$7,431,924

Compensation

Mr. John J. Engel has been the Chief Executive Officer and President of WESCO International Inc. since September 1, 2009 and its Chairman of WESCO International Inc. since May 25, 2011. Mr. Engel served as ...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD7.43M) is above average for companies of similar size in the US market ($USD3.87M).

Compensation vs Earnings: John's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.9yrs

Average Tenure

57yo

Average Age

Experienced Management: WCC's management team is considered experienced (3.9 years average tenure).


Board Age and Tenure

7.1yrs

Average Tenure

60yo

Average Age

Experienced Board: WCC's board of directors are considered experienced (7.1 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$74,09207 Jun 19
Lynn Utter
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,513
Max PriceUS$48.97
BuyUS$15,678,82927 Mar 19
Blue Harbour Group, L.P.
EntityCompany
Shares305,600
Max PriceUS$51.49
BuyUS$99,98715 Mar 19
Christine Wolf
EntityIndividual
Shares1,874
Max PriceUS$53.35
SellUS$160,38307 Mar 19
James Singleton
EntityIndividual
Role
Lead Director
Lead Director
Shares3,000
Max PriceUS$53.46

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • John Engel (57yo)

    Chairman

    • Tenure: 10.3yrs
    • Compensation: US$7.43m
  • Nelson Squires (58yo)

    Senior VP & COO

    • Tenure: 0.2yrs
  • Diane Lazzaris (52yo)

    Senior VP & General Counsel

    • Tenure: 5.9yrs
    • Compensation: US$1.55m
  • Dave Schulz (53yo)

    Senior VP & CFO

    • Tenure: 3.2yrs
    • Compensation: US$2.58m
  • Brian Begg

    VP & Treasurer

    • Tenure: 11.2yrs
  • Juan Picon (49yo)

    Group VP & GM of United States

    • Tenure: 0yrs
  • Will Ruthrauff

    Director of Investor Relations & Corporate Communications

    • Tenure: 0yrs
  • Robert Minicozzi (57yo)

    VP & Chief Information Officer

    • Tenure: 3.9yrs
    • Compensation: US$987.39k
  • Christine Wolf (58yo)

    Senior VP & Chief Human Resources Officer

    • Tenure: 1.5yrs
    • Compensation: US$996.78k
  • Hemant Porwal

    Vice President of Global Supply Chain & Operations

    • Tenure: 0yrs

Board Members

  • Jamie Singleton (63yo)

    Lead Director

    • Tenure: 0yrs
    • Compensation: US$249.00k
  • John Engel (57yo)

    Chairman

    • Tenure: 10.3yrs
    • Compensation: US$7.43m
  • Steve Raymund (64yo)

    Independent Director

    • Tenure: 13.9yrs
    • Compensation: US$244.00k
  • Matt Espe (60yo)

    Independent Director

    • Tenure: 3.1yrs
    • Compensation: US$229.00k
  • Bobby Griffin (70yo)

    Independent Director

    • Tenure: 5.6yrs
    • Compensation: US$224.00k
  • John Morgan (65yo)

    Independent Director

    • Tenure: 11.8yrs
    • Compensation: US$239.00k
  • Laura Thompson (55yo)

    Director

    • Tenure: 0.2yrs
  • Lynn Utter (56yo)

    Independent Director

    • Tenure: 13.9yrs
    • Compensation: US$229.00k
  • Eash Sundaram (48yo)

    Independent Director

    • Tenure: 1.3yrs
    • Compensation: US$102.10k

Company Information

WESCO International, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: WESCO International, Inc.
  • Ticker: WCC
  • Exchange: NYSE
  • Founded: 1922
  • Industry: Trading Companies and Distributors
  • Sector: Capital Goods
  • Market Cap: US$2.322b
  • Shares outstanding: 41.80m
  • Website: https://www.wesco.com

Number of Employees


Location

  • WESCO International, Inc.
  • 225 West Station Square Drive
  • Suite 700
  • Pittsburgh
  • Pennsylvania
  • 15219
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WCCNYSE (New York Stock Exchange)YesCommon StockUSUSDMay 1999
WP7DB (Deutsche Boerse AG)YesCommon StockDEEURMay 1999

Biography

WESCO International, Inc. distributes electrical, industrial, and communications maintenance, repair and operating (MRO) and original equipment manufacturers products and construction materials in North Am ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/11 23:40
End of Day Share Price2019/12/11 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.