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Why I Like MSC Industrial Direct Co., Inc. (NYSE:MSM)

Simply Wall St

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As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of MSC Industrial Direct Co., Inc. (NYSE:MSM), it is a financially-sound , dividend-paying company with a a great track record of performance. Below, I've touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, read the full report on MSC Industrial Direct here.

Established dividend payer with proven track record

Over the past few years, MSM has demonstrated a proven ability to generate robust returns of 21% Not surprisingly, MSM outperformed its industry which returned 12%, giving us more conviction of the company's capacity to drive bottom-line growth going forward. MSM's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. MSM seems to have put its debt to good use, generating operating cash levels of 0.54x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.

NYSE:MSM Income Statement, May 1st 2019

Income investors would also be happy to know that MSM is a great dividend company, with a current yield standing at 3.1%. MSM has also been regularly increasing its dividend payments to shareholders over the past decade.

NYSE:MSM Historical Dividend Yield, May 1st 2019

Next Steps:

For MSC Industrial Direct, there are three important aspects you should further examine:

  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. Valuation: What is MSM worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MSM is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of MSM? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

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.