Head-To-Head Analysis: Siemens (OTCMKTS:SIEGY) versus MSC Industrial Direct (NYSE:MSM)

Siemens (OTCMKTS:SIEGY) and MSC Industrial Direct (NYSE:MSM) are both industrials companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.

Analyst Ratings

This is a breakdown of recent ratings for Siemens and MSC Industrial Direct, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Siemens	2	7	0	0	1.78
MSC Industrial Direct	0	5	1	1	2.43

MSC Industrial Direct has a consensus price target of $91.50, suggesting a potential upside of 3.84%. Given MSC Industrial Direct’s stronger consensus rating and higher possible upside, analysts clearly believe MSC Industrial Direct is more favorable than Siemens.

Profitability

This table compares Siemens and MSC Industrial Direct’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Siemens	12.59%	12.61%	5.01%
MSC Industrial Direct	5.29%	15.21%	8.50%

Earnings and Valuation

This table compares Siemens and MSC Industrial Direct”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Siemens	$82.35 billion	2.47	$9.00 billion	$6.64	19.11
MSC Industrial Direct	$3.77 billion	1.30	$199.33 million	$3.56	24.75

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

Dividends

Siemens pays an annual dividend of $2.00 per share and has a dividend yield of 1.6%. MSC Industrial Direct pays an annual dividend of $3.48 per share and has a dividend yield of 3.9%. Siemens pays out 30.1% of its earnings in the form of a dividend. MSC Industrial Direct pays out 97.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MSC Industrial Direct has raised its dividend for 3 consecutive years. MSC Industrial Direct is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Siemens has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, MSC Industrial Direct has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.

Institutional and Insider Ownership

0.8% of Siemens shares are owned by institutional investors. Comparatively, 79.3% of MSC Industrial Direct shares are owned by institutional investors. 18.3% of MSC Industrial Direct shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

MSC Industrial Direct beats Siemens on 11 of the 18 factors compared between the two stocks.

About Siemens

Siemens Aktiengesellschaft, a technology company, focuses in the areas of automation and digitalization in Europe, Commonwealth of Independent States, Africa, the Middle East, the Americas, Asia, and Australia. It operates through Digital Industries, Smart Infrastructure, Mobility, Siemens Healthineers, and Siemens Financial Services (SFS) segments. The Digital Industries segment provides automation systems and software for factories, numerical control systems, servo motors, drives and inverters, and integrated automation systems for machine tools and production machines; process control systems, machine-to-machine communication products, sensors and radio frequency identification systems; software for production and product lifecycle management, and simulation and testing of mechatronic systems; and the Mendix cloud-native low-code application development platform. The Smart Infrastructure segment offers products, systems, solutions, services, and software to support sustainable transition in energy generation from fossil and renewable sources; sustainable buildings and communities; and buildings, electrification, and electrical products. The Mobility segment provides rail passenger and freight transportation, such as vehicles, trams and light rail, and commuter trains, as well as trains and passenger coaches; locomotives and solutions for automated transportation; products and solutions for rail automation; electrification products; maintenance and digital services; and digital and cloud-based solutions, and related services. The Siemens Healthineers segment develops, manufactures, and sells various diagnostic and therapeutic products and services; and provides clinical consulting and training services. The SFS segment offers debt and equity investments; leasing, lending, and working capital, structured, equipment, and project financing; and financial advisory services. Siemens Aktiengesellschaft was founded in 1847 and is headquartered in Munich, Germany.

About MSC Industrial Direct

MSC Industrial Direct Co., Inc., together with its subsidiaries, distributes metalworking and maintenance, repair, and operations (MRO) products and services in the United States, Canada, Mexico, the United Kingdom, and internationally. The company's MRO products include cutting tools, measuring instruments, tooling components, metalworking products, fasteners, flat stock products, raw materials, abrasives, machinery hand and power tools, safety and janitorial supplies, plumbing supplies, materials handling products, power transmission components, and electrical supplies. It offers stock-keeping units through its catalogs and brochures; e-commerce channels, including its website, mscdirect.com; inventory management solutions; and customer care centers, customer fulfillment centers, regional inventory centers, and warehouses. The company serves individual machine shops, manufacturing companies, and government agencies. MSC Industrial Direct Co., Inc. was founded in 1941 and is headquartered in Melville, New York.