Wajax (OTCMKTS:WJXFF) vs. W.W. Grainger (NYSE:GWW) Critical Comparison

Wajax (OTCMKTS:WJXFF) and W.W. Grainger (NYSE:GWW) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.

Profitability

This table compares Wajax and W.W. Grainger’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wajax	N/A	N/A	N/A
W.W. Grainger	11.16%	58.02%	22.76%

Dividends

Wajax pays an annual dividend of $2.40 per share and has a dividend yield of 11.8%. W.W. Grainger pays an annual dividend of $7.44 per share and has a dividend yield of 0.9%. Wajax pays out 96.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. W.W. Grainger pays out 20.7% of its earnings in the form of a dividend. W.W. Grainger has raised its dividend for 52 consecutive years.

Insider & Institutional Ownership

32.4% of Wajax shares are held by institutional investors. Comparatively, 71.2% of W.W. Grainger shares are held by institutional investors. 9.9% of W.W. Grainger shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Wajax and W.W. Grainger, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wajax	0	0	0	0	N/A
W.W. Grainger	1	5	3	0	2.22

Wajax currently has a consensus target price of $21.00, indicating a potential upside of 2.94%. W.W. Grainger has a consensus target price of $734.63, indicating a potential downside of 6.90%. Given Wajax’s higher probable upside, research analysts plainly believe Wajax is more favorable than W.W. Grainger.

Earnings and Valuation

This table compares Wajax and W.W. Grainger’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wajax	N/A	N/A	N/A	$2.48	8.22
W.W. Grainger	$15.23 billion	2.57	$1.55 billion	$35.86	22.00

W.W. Grainger has higher revenue and earnings than Wajax. Wajax 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.

Summary

W.W. Grainger beats Wajax on 11 of the 13 factors compared between the two stocks.

About Wajax

Wajax Corporation provides sales, parts, and services to construction, forestry, mining, industrial/commercial, oil sands, transportation, metal processing, government, utilities, and oil and gas sectors. The company offers compact excavators, dump trucks, excavators, wheel loaders, and wheeled excavators; aerial devices, boom lifts, cranes, digger derricks, drills, lifts, and material and scissor lifts; engines and transmissions; and feller bunchers, felling heads, flail debarkers, forwarders, grinders, harvesting heads, log loaders, skidders, track and wheel harvesters, and woodchippers. It also provides bearings, bulk material handling, filtration, fluid handling, hydraulics, industrial electric motors and variable frequency drives, instrumentation, pneumatics, power transmissions, and safety and mill supplies, as well as sealing, belting, lubricants, and hydraulic hoses; combination sweeper scrubbers, container handlers, electric ride scooters, end rider trucks, forklifts, order pickers, pallet stackers and trucks, reach stackers, rider and walk behind sweepers, side loaders, tow tractors, and utility vehicles; and equipment transport, filtration, fluid handling, mining excavators, rigid frame trucks, rope shovel, underground battery powered and drill jumbos, underground haul trucks and loaders, underground roof bolters and scaling machines, and underground utility trucks. In addition, the company offers power generation solutions; and cages and partitions, guarding and barriers, lockers, cabinets, workstations, rack accessories and protections, racking, shelving, and storage platforms, as well as storage system design, installation, and inspection services. Further, it offers equipment rentals, equipment parts and support, and engineered repair services. The company was formerly known as Wajax Income Fund and changed its name to Wajax Corporation in January 2011. Wajax Corporation was founded in 1858 and is headquartered in Mississauga, Canada.

About W.W. Grainger

W.W. Grainger, Inc. distributes maintenance, repair, and operating products and services in the United States, Japan, Canada, the United Kingdom, and internationally. The company operates through two segments, High-Touch Solutions N.A. and Endless Assortment. The company provides safety and security supplies, material handling and storage equipment, pumps and plumbing equipment, cleaning and maintenance supplies, and metalworking and hand tools. It also offers technical support and inventory management services. The company serves businesses, corporations, government entities, and other institutions 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.