Analyzing Reliance (NYSE:RS) & WESCO International (NYSE:WCC)

Reliance (NYSE:RS – Get Free Report) and WESCO International (NYSE:WCC – Get Free Report) are both large-cap industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.

Volatility and Risk

Reliance has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, WESCO International has a beta of 1.53, suggesting that its share price is 53% more volatile than the S&P 500.

Profitability

This table compares Reliance and WESCO International’s net margins, return on equity and return on assets.

Dividends

Reliance pays an annual dividend of $5.00 per share and has a dividend yield of 1.3%. WESCO International pays an annual dividend of $2.00 per share and has a dividend yield of 0.5%. Reliance pays out 29.1% of its earnings in the form of a dividend. WESCO International pays out 13.8% 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. Reliance has increased its dividend for 15 consecutive years and WESCO International has increased its dividend for 2 consecutive years. Reliance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current recommendations for Reliance and WESCO International, as provided by MarketBeat.

Reliance presently has a consensus target price of $379.83, indicating a potential downside of 1.84%. WESCO International has a consensus target price of $394.17, indicating a potential upside of 7.36%. Given WESCO International’s stronger consensus rating and higher probable upside, analysts plainly believe WESCO International is more favorable than Reliance.

Valuation & Earnings

This table compares Reliance and WESCO International”s gross revenue, earnings per share (EPS) and valuation.

Reliance has higher earnings, but lower revenue than WESCO International. Reliance is trading at a lower price-to-earnings ratio than WESCO International, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

79.3% of Reliance shares are owned by institutional investors. Comparatively, 93.8% of WESCO International shares are owned by institutional investors. 0.4% of Reliance shares are owned by company insiders. Comparatively, 2.6% of WESCO International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

WESCO International beats Reliance on 10 of the 17 factors compared between the two stocks.

About Reliance

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Reliance, Inc. operates as a diversified metal solutions provider and the metals service center company in the United States, Canada, and internationally. The company distributes a line of approximately 100,000 metal products, including alloy, aluminum, brass, copper, carbon steel, stainless steel, titanium, and specialty steel products; and provides metals processing services to general manufacturing, non-residential construction, transportation, aerospace, energy, electronics and semiconductor fabrication, and heavy industries. It sells its products directly to original equipment manufacturers, which primarily include small machine shops and fabricators. The company was formerly known as Reliance Steel & Aluminum Co. and changed its name to Reliance, Inc. in February 2024. Reliance, Inc. was founded in 1939 and is based in Scottsdale, Arizona.

About WESCO International

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WESCO International, Inc. provides business-to-business distribution, logistics services, and supply chain solutions in the United States, Canada, and internationally. It operates through three segments: Electrical & Electronic Solutions (EES), Communications & Security Solutions (CSS), and Utility and Broadband Solutions (UBS). The EES segment supplies products and supply chain solutions, including electrical equipment and supplies, automation and connected devices, security, lighting, wire and cable, and safety, as well as maintenance, repair, and operating (MRO) products. This segment also offers contractor solutions, direct and indirect manufacturing supply chain optimization programs, lighting and renewables advisory services, and digital and automation solutions. The CSS segment operates in the network infrastructure and security markets. This segment sells products directly to end-users or through various channels, including data communications contractors, security, network, professional audio/visual, and systems integrators. It also provides safety and energy management solutions. The UBS segment offers products and services to investor-owned utilities; public power companies; and service and wireless providers, broadband operators, and contractors. This segment's products include wire and cables, transformers, transmission and distribution hardware, switches, protective devices, connectors, conduits, pole line hardware, racks, cabinets, safety and MRO products, and point-to-point wireless devices. This segment also offers various service solutions, including fiber project management, high and medium voltage project design and support, pre-wired meters and capacitor banks, meter testing and metering infrastructure installation, personal protective equipment dielectric testing, and tool repair, as well as emergency response, storage yard, materials, and logistics management. The company was founded in 1922 and is headquartered in Pittsburgh, Pennsylvania.