MSC Industrial Direct Company, Inc. MSM announced a 2% hike in the quarterly dividend payout. This is in sync with the company's ongoing commitment to deliver shareholder value and its trust in its financial robustness.

Details of MSM’s Quarterly Dividend Hike

MSC Industrial will pay the new quarterly dividend of 85 cents on Nov. 27, 2024, to shareholders of record as of Nov. 13, 2024. The raised dividend takes the company’s dividend yield from the current 4.00%  to 4.10%.

MSC Industrial has a three-year dividend growth rate of 3.4%. It has a payout ratio of 61.5%, higher than the industry’s 27.6%. 

MSM’s peer W.W. Grainger, Inc. GWW has a quarterly dividend of $2.05. GWW has a three-year dividend growth rate of 8.2%. It has a payout ratio of 21.6%.

MSC Industrial’s Cash Position & Balance Sheet

The company had cash and cash equivalents of $25.9 million at the end of the fiscal third quarter compared with $50 million at the end of fiscal 2023.  It generated cash flow from operating activities of $303 million in the first nine months of fiscal 2024 compared with $567 million in the comparable period in fiscal 2023.
 
The company’s long-term debt was around $300 million at the end of the reported quarter, up from $224 million at the fiscal 2023-end.

MSM’s Q3 Top Line Dips Y/Y

MSC Industrial reported third-quarter fiscal 2024 (ended on June 1, 2024) adjusted earnings per share of $1.33, meeting the Zacks Consensus Estimate. The bottom line decreased 23.6% year over year, attributed to the prolonged weakness in the manufacturing sector, wherein MSM has a significant exposure.
 
MSC Industrial generated revenues of around $979 million, down 7% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $993 million. Revenues were impacted by a 300-basis-point headwind from the non-recurrence of Public Sector orders reported in the prior year. This, coupled with the weakness in the manufacturing sector, led to a 7.1% decline in average daily sales.

MSC Industrial’s Share Price Lags Industry

The company’s shares have lost 17.4% year to date against the industry’s 15% growth.

 

Image Source: Zacks Investment Research

 

MSM’s Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Industrial Products sector are Crane Company CR and Parker-Hannifin Corporation PH. These three companies have a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Crane’s 2024 earnings is pegged at $5.07 per share. The consensus estimate for 2024 earnings has moved north by 6% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 11.2%. CR shares have gained 75.2% in a year.

The Zacks Consensus Estimate for Parker-Hannifin’s fiscal 2025 earnings is pegged at $26.65 per share. The company has a trailing four-quarter average earnings surprise of 11.2%. PH shares have gained 64.1% in a year.