Grainger vs Fastenal Which Is Superior?

Grainger (GWW) and Fastenal (FAST) are two leading companies in the industrial supplies sector, both operating in the distribution of maintenance, repair, and operating (MRO) products. Grainger focuses on serving a broad range of customers through its vast product offerings and extensive distribution network. On the other hand, Fastenal takes a more localized approach, with a strong emphasis on providing customized solutions to its customer base. Both companies have shown consistent growth and profitability, making them attractive options for investors seeking exposure to the industrial supplies industry.

Grainger or Fastenal?

When comparing Grainger and Fastenal, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Grainger and Fastenal.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Grainger has a dividend yield of 3.0%, while Fastenal has a dividend yield of 1.99%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Grainger reports a 5-year dividend growth of 5.47% year and a payout ratio of -4463.64%. On the other hand, Fastenal reports a 5-year dividend growth of 2.94% year and a payout ratio of 94.14%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Grainger P/E ratio at -1536.67 and Fastenal's P/E ratio at 38.91. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Grainger P/B ratio is 0.89 while Fastenal's P/B ratio is 12.49.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Grainger has seen a 5-year revenue growth of 0.00%, while Fastenal's is 0.49%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Grainger's ROE at -0.06% and Fastenal's ROE at 33.30%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are £228.00 for Grainger and $78.09 for Fastenal. Over the past year, Grainger's prices ranged from £218.50 to £276.00, with a yearly change of 26.32%. Fastenal's prices fluctuated between $61.33 and $84.88, with a yearly change of 38.40%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.