Ashtead Group (OTCMKTS:ASHTY) vs. W.W. Grainger (NYSE:GWW) Financial Analysis

W.W. Grainger (NYSE:GWW) and Ashtead Group (OTCMKTS:ASHTY) are both large-cap industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Dividends

W.W. Grainger pays an annual dividend of $9.04 per share and has a dividend yield of 1.0%. Ashtead Group pays an annual dividend of $5.63 per share and has a dividend yield of 2.2%. W.W. Grainger pays out 25.4% of its earnings in the form of a dividend. Ashtead Group pays out 41.2% 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 increased its dividend for 55 consecutive years.

Earnings and Valuation

This table compares W.W. Grainger and Ashtead Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
W.W. Grainger	$17.75 billion	2.53	$1.91 billion	$35.66	26.52
Ashtead Group	$10.79 billion	2.49	$1.51 billion	$13.65	18.72

W.W. Grainger has higher revenue and earnings than Ashtead Group. Ashtead Group 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.

Institutional & Insider Ownership

80.7% of W.W. Grainger shares are owned by institutional investors. Comparatively, 0.8% of Ashtead Group shares are owned by institutional investors. 6.1% of W.W. Grainger shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
W.W. Grainger	2	6	1	0	1.89
Ashtead Group	2	2	2	0	2.00

W.W. Grainger presently has a consensus price target of $1,009.43, suggesting a potential upside of 6.73%. Given W.W. Grainger’s higher probable upside, equities research analysts plainly believe W.W. Grainger is more favorable than Ashtead Group.

Volatility & Risk

W.W. Grainger has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, Ashtead Group has a beta of 1.76, suggesting that its share price is 76% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
W.W. Grainger	10.99%	49.63%	21.63%
Ashtead Group	13.68%	20.89%	7.26%

Summary

W.W. Grainger beats Ashtead Group on 12 of the 17 factors compared between the two stocks.

About W.W. Grainger

W.W. Grainger, Inc., together with its subsidiaries, distributes maintenance, repair, and operating products and services primarily in North America, Japan, the United Kingdom, and internationally. The company operates through two segments, High-Touch Solutions N.A. and Endless Assortment. The company provides safety, security, material handling and storage equipment, pumps and plumbing equipment, cleaning and maintenance, and metalworking and hand tools. It also offers technical support and inventory management services. The company serves smaller businesses to large corporations, government entities, and other institutions, as well as commercial, healthcare, and manufacturing industries through sales and service representatives, and electronic and ecommerce channels. W.W. Grainger, Inc. was founded in 1927 and is headquartered in Lake Forest, Illinois.

About Ashtead Group

Ashtead Group plc, together with its subsidiaries, engages in the construction, industrial, and general equipment rental business in the United States, the United Kingdom, and Canada. It provides pumps, power generation, heating, cooling, scaffolding, traffic management, temporary flooring, trench shoring, and lifting services. The company offers its products and services for facilities maintenance and municipalities, such as office complexes, apartment complexes, government, hospitals, data centers, parks and recreation departments, schools and universities, shopping centers, pavement/kerb repairs, and golf course maintenance; construction of airports, highways and bridges, office buildings, data centers, schools and universities, shopping centers, residential, remodeling, manufacturing plants, and green energy plants; emergency response for fire, hurricanes, flooding, tornadoes, winter, storms, residential and health emergencies, alternative care facilities, points of distribution, and mobile testing facilities; and entertainment and special events, including national events, concerts, sporting events, film and telvision production, theme parks, festivals farmers' markets, local 5k runs, and cycle races. It operates 1,094 stores in the United States, 119 stores in Canada, and 185 stores in the United Kingdom under the Sunbelt Rentals brand. The company was founded in 1947 and is headquartered in London, the United Kingdom.