U.S. Markets close in 5 hrs 22 mins

Where MSC Industrial Direct Co., Inc. (NYSE:MSM) Stands In Terms Of Earnings Growth Against Its Industry

Simply Wall St

Want to participate in a research study? Help shape the future of investing tools and earn a $60 gift card!

For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on MSC Industrial Direct Co., Inc. (NYSE:MSM) useful as an attempt to give more color around how MSC Industrial Direct is currently performing.

View our latest analysis for MSC Industrial Direct

Were MSM's earnings stronger than its past performances and the industry?

MSM's trailing twelve-month earnings (from 01 December 2018) of US$344m has jumped 45% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 6.7%, indicating the rate at which MSM is growing has accelerated. How has it been able to do this? Let's see if it is only owing to industry tailwinds, or if MSC Industrial Direct has seen some company-specific growth.

NYSE:MSM Income Statement, April 2nd 2019

In terms of returns from investment, MSC Industrial Direct has invested its equity funds well leading to a 25% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 16% exceeds the US Trade Distributors industry of 5.6%, indicating MSC Industrial Direct has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for MSC Industrial Direct’s debt level, has increased over the past 3 years from 22% to 26%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. While MSC Industrial Direct has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research MSC Industrial Direct to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for MSM’s future growth? Take a look at our free research report of analyst consensus for MSM’s outlook.
  2. Financial Health: Are MSM’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 01 December 2018. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.