Critical Survey: WESCO International (WCC) vs. Its Peers

WESCO International (NYSE:WCC) is one of 159 publicly-traded companies in the “Trading Companies & Distributors” industry, but how does it contrast to its competitors? We will compare WESCO International to related companies based on the strength of its analyst recommendations, profitability, risk, institutional ownership, valuation, earnings and dividends.

Institutional and Insider Ownership

93.8% of WESCO International shares are owned by institutional investors. Comparatively, 50.9% of shares of all “Trading Companies & Distributors” companies are owned by institutional investors. 2.6% of WESCO International shares are owned by insiders. Comparatively, 17.1% of shares of all “Trading Companies & Distributors” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares WESCO International and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WESCO International	2.84%	14.95%	4.45%
WESCO International Competitors	2.86%	-33.67%	3.56%

Earnings and Valuation

This table compares WESCO International and its competitors revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
WESCO International	$23.51 billion	$640.20 million	25.31
WESCO International Competitors	$6.45 billion	$364.19 million	24.85

WESCO International has higher revenue and earnings than its competitors. WESCO International is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for WESCO International and its competitors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WESCO International	0	1	7	1	3.00
WESCO International Competitors	1408	4868	6682	227	2.43

WESCO International currently has a consensus price target of $374.29, suggesting a potential upside of 2.20%. As a group, “Trading Companies & Distributors” companies have a potential upside of 5.50%. Given WESCO International’s competitors higher possible upside, analysts clearly believe WESCO International has less favorable growth aspects than its competitors.

Volatility and Risk

WESCO International has a beta of 1.54, indicating that its stock price is 54% more volatile than the S&P 500. Comparatively, WESCO International’s competitors have a beta of 1.28, indicating that their average stock price is 28% more volatile than the S&P 500.

Dividends

WESCO International pays an annual dividend of $2.00 per share and has a dividend yield of 0.5%. WESCO International pays out 13.8% of its earnings in the form of a dividend. As a group, “Trading Companies & Distributors” companies pay a dividend yield of 2.9% and pay out 36.5% of their earnings in the form of a dividend. WESCO International has increased its dividend for 2 consecutive years.

Summary

WESCO International beats its competitors on 11 of the 15 factors compared.

WESCO International Company Profile

WESCO International, Inc. provides business-to-business distribution, logistics services, and supply chain solutions in the United States, Canada, and internationally. It operates through three segments: Electrical & Electronic Solutions (EES), Communications & Security Solutions (CSS), and Utility and Broadband Solutions (UBS). The EES segment supplies products and supply chain solutions, including electrical equipment and supplies, automation and connected devices, security, lighting, wire and cable, and safety, as well as maintenance, repair, and operating (MRO) products. This segment also offers contractor solutions, direct and indirect manufacturing supply chain optimization programs, lighting and renewables advisory services, and digital and automation solutions. The CSS segment operates in the network infrastructure and security markets. This segment sells products directly to end-users or through various channels, including data communications contractors, security, network, professional audio/visual, and systems integrators. It also provides safety and energy management solutions. The UBS segment offers products and services to investor-owned utilities; public power companies; and service and wireless providers, broadband operators, and contractors. This segment's products include wire and cables, transformers, transmission and distribution hardware, switches, protective devices, connectors, conduits, pole line hardware, racks, cabinets, safety and MRO products, and point-to-point wireless devices. This segment also offers various service solutions, including fiber project management, high and medium voltage project design and support, pre-wired meters and capacitor banks, meter testing and metering infrastructure installation, personal protective equipment dielectric testing, and tool repair, as well as emergency response, storage yard, materials, and logistics management. The company was founded in 1922 and is headquartered in Pittsburgh, Pennsylvania.