Ferguson (NYSE:FERG – Get Free Report) and W.W. Grainger (NYSE:GWW – Get Free Report) are both large-cap industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.
Insider & Institutional Ownership
82.0% of Ferguson shares are held by institutional investors. Comparatively, 80.7% of W.W. Grainger shares are held by institutional investors. 0.2% of Ferguson shares are held by insiders. Comparatively, 6.3% of W.W. Grainger shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Ferguson and W.W. Grainger, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ferguson | 0 | 5 | 10 | 2 | 2.82 |
| W.W. Grainger | 1 | 7 | 2 | 0 | 2.10 |
Profitability
This table compares Ferguson and W.W. Grainger’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ferguson | 6.82% | 37.24% | 12.31% |
| W.W. Grainger | 9.92% | 48.73% | 22.40% |
Risk and Volatility
Ferguson has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, W.W. Grainger has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500.
Dividends
Ferguson pays an annual dividend of $3.56 per share and has a dividend yield of 1.6%. W.W. Grainger pays an annual dividend of $9.96 per share and has a dividend yield of 0.8%. Ferguson pays out 41.8% of its earnings in the form of a dividend. W.W. Grainger pays out 25.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. W.W. Grainger has increased its dividend for 55 consecutive years.
Valuation & Earnings
This table compares Ferguson and W.W. Grainger”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ferguson | $31.32 billion | 1.38 | $1.86 billion | $8.51 | 26.18 |
| W.W. Grainger | $17.94 billion | 3.37 | $1.71 billion | $39.22 | 32.70 |
Ferguson has higher revenue and earnings than W.W. Grainger. Ferguson is trading at a lower price-to-earnings ratio than W.W. Grainger, indicating that it is currently the more affordable of the two stocks.
About Ferguson
Ferguson Enterprises Inc. distributes plumbing and heating products in North America. The company provides expertise, solutions, and products, including infrastructure, plumbing, appliances, fire, and fabrication, as well as heating, ventilation, and air conditioning (HVAC) to residential and non-residential customers. It also supplies specialist water and wastewater treatment products to residential, commercial, and infrastructure contractors, as well as supplies pipe, valves, and fittings solutions to industrial customers. In addition, it offers customized solutions, such as virtual design, fabrication, valve actuation, pre-assembly, kitting, installation, and project management services, as well as after-sales support that comprises warranty, credit, project-based billing, returns and maintenance, and repair and operations support. The company sells its products through a network of distribution centers, branches, counter service and specialist sales associates, showroom consultants, and e-commerce channels. Ferguson Enterprises Inc. was founded in 1953 and is headquartered in Newport News, Virginia.
About W.W. Grainger
W.W. Grainger, Inc., together with its subsidiaries, distributes maintenance, repair, and operating products and services primarily in North America, Japan, the United Kingdom, and internationally. The company operates through two segments, High-Touch Solutions N.A. and Endless Assortment. The company provides safety, security, material handling and storage equipment, pumps and plumbing equipment, cleaning and maintenance, and metalworking and hand tools. It also offers technical support and inventory management services. The company serves smaller businesses to large corporations, government entities, and other institutions, as well as commercial, healthcare, and manufacturing industries through sales and service representatives, and electronic and ecommerce channels. W.W. Grainger, Inc. was founded in 1927 and is headquartered in Lake Forest, Illinois.
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