Head-To-Head Review: Global Industrial (NYSE:GIC) & Watsco (NYSE:WSO)

Global Industrial (NYSE:GIC) and Watsco (NYSE:WSO) are both industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, institutional ownership, analyst recommendations and risk.

Valuation and Earnings

This table compares Global Industrial and Watsco”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Global Industrial	$1.38 billion	1.30	$72.10 million	$2.40	19.56
Watsco	$7.24 billion	1.76	$496.99 million	$11.32	27.26

Watsco has higher revenue and earnings than Global Industrial. Global Industrial is trading at a lower price-to-earnings ratio than Watsco, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Global Industrial and Watsco, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Global Industrial	0	3	0	0	2.00
Watsco	0	8	2	0	2.20

Global Industrial currently has a consensus price target of $39.00, suggesting a potential downside of 16.92%. Watsco has a consensus price target of $373.62, suggesting a potential upside of 21.09%. Given Watsco’s stronger consensus rating and higher possible upside, analysts plainly believe Watsco is more favorable than Global Industrial.

Risk & Volatility

Global Industrial has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, Watsco has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500.

Profitability

This table compares Global Industrial and Watsco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Global Industrial	6.31%	22.06%	12.14%
Watsco	6.31%	13.97%	9.69%

Institutional and Insider Ownership

31.2% of Global Industrial shares are owned by institutional investors. Comparatively, 89.7% of Watsco shares are owned by institutional investors. 64.5% of Global Industrial shares are owned by company insiders. Comparatively, 12.9% of Watsco shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Global Industrial pays an annual dividend of $1.12 per share and has a dividend yield of 2.4%. Watsco pays an annual dividend of $13.20 per share and has a dividend yield of 4.3%. Global Industrial pays out 46.7% of its earnings in the form of a dividend. Watsco pays out 116.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Global Industrial has increased its dividend for 9 consecutive years and Watsco has increased its dividend for 13 consecutive years. Watsco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Watsco beats Global Industrial on 12 of the 16 factors compared between the two stocks.

About Global Industrial

Global Industrial Company is a distributor of industrial and commercial products, serving businesses, government organizations and other institutions. The company sells through its e-commerce platform and sales teams, with operations focused on the United States and Canada. Its broad product range includes material-handling and storage equipment, tools, safety supplies, furniture, janitorial products, packaging materials and maintenance, repair and operations supplies. Products are offered under the Global Industrial brand as well as through third-party manufacturers.

About Watsco

Watsco, Inc. distributes air-conditioning, heating, and refrigeration equipment and related parts and supplies. Its products serve residential and light commercial applications, including systems used in homes and businesses, as well as components and supplies for contractors who install and maintain them. The company sells products from a range of manufacturers through a network of distribution locations and digital platforms. Watsco serves customers in the United States, Canada, Mexico, and parts of Latin America and the Caribbean, supporting the installation, repair, and replacement of HVAC and refrigeration systems.