Head to Head Analysis: Fastenal (NASDAQ:FAST) and Diploma (OTCMKTS:DPLMF)

Fastenal (NASDAQ:FAST) and Diploma (OTCMKTS:DPLMF) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.

Insider and Institutional Ownership

81.4% of Fastenal shares are owned by institutional investors. 0.4% of Fastenal shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Fastenal and Diploma’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fastenal	15.44%	33.30%	25.19%
Diploma	N/A	N/A	N/A

Valuation and Earnings

This table compares Fastenal and Diploma”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fastenal	$7.48 billion	6.00	$1.16 billion	$2.01	38.98
Diploma	N/A	N/A	N/A	N/A	N/A

Fastenal has higher revenue and earnings than Diploma.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Fastenal and Diploma, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fastenal	0	7	2	0	2.22
Diploma	0	0	0	0	N/A

Fastenal currently has a consensus price target of $73.33, suggesting a potential downside of 6.39%. Given Fastenal’s higher probable upside, equities research analysts clearly believe Fastenal is more favorable than Diploma.

Summary

Fastenal beats Diploma on 8 of the 8 factors compared between the two stocks.

About Fastenal

Fastenal Company, together with its subsidiaries, engages in the wholesale distribution of industrial and construction supplies in the United States, Canada, Mexico, North America, and internationally. It offers fasteners, and related industrial and construction supplies under the Fastenal name. The company’s fastener products include threaded fasteners, bolts, nuts, screws, studs, and related washers that are used in manufactured products and construction projects, as well as in the maintenance and repair of machines. It also offers miscellaneous supplies and hardware, including pins, machinery keys, concrete anchors, metal framing systems, wire ropes, strut products, rivets, and related accessories. The company serves the manufacturing market comprising original equipment manufacturers; maintenance, repair, and operations customers; non-residential construction market; farmers, truckers, railroads, mining companies, schools, and retail trades; and oil exploration, production, and refinement companies, as well as federal, state, and local governmental entities. Fastenal Company was founded in 1967 and is headquartered in Winona, Minnesota.

About Diploma

Diploma PLC, together with its subsidiaries, supplies specialized technical products and services in the United Kingdom, Continental Europe, North America, and internationally. It operates through three business sectors: Life Sciences, Seals, and Controls. The Life Sciences sector supplies technology-enabled products used in surgical procedures in operating theatres and endoscopy; testing equipment and services for clinical laboratories; and bio-pharma, food safety and testing, and other research-oriented products. It serves hospitals, clinical laboratories, and research facilities. The Seals sector supplies various seals, gaskets, cylinders, components, and kits used in heavy mobile machinery; and O-rings, fittings, hydraulic and industrial hoses, pneumatics products, pumps, and related accessories. The Controls sector offers wire and cabling, interconnect, specialty fasteners, and adhesive and industrial automation solutions for various applications. Diploma PLC was incorporated in 1999 and is based in London, the United Kingdom.