Top 15 Industrial Distribution Stocks, Ranked by Marvin Score
Marvin's rules ranked 15 industrial distribution stocks by Overall score. Global Industrial Co leads, followed by Applied Industrial Technologies and W.W. Grainger. Each pick below shows its key figures and one caution.
Industrial distribution companies buy products from manufacturers and sell them on to businesses, such as tools, parts, pipes, electrical gear and supplies. Their results often depend on steady orders, healthy margins and careful use of cash and debt. This list covers 15 such stocks that Marvin's rules selected.
The order is set by Marvin's Overall score, which compares each company with others in the same industry today. A high score means a company looks strong next to its distribution peers. It does not mean the stock will rise, and it is not a recommendation.
Look at the figures behind each score. Some companies here have wide margins and low debt, while others are growing quickly but losing money on operations. A missing figure is noted where it applies.
The list
How Marvin ranked these stocks
Marvin included companies above a minimum size threshold and ranked them by Marvin scores, which run from 0 to 100. The scores are relative to each company's own industry, here Industrial - Distribution, with the highest Overall score first. A score of this kind says how a company compares with its industry peers as of the date shown, not how it compares with all stocks.
Companies above about $300 million in size, ranked by Marvin scores (0-100, relative to each company's own industry). The Industrial - Distribution industry, highest Overall score first.
The stocks, one by one
Global Industrial Co GIC
Global Industrial Co has the top Overall score of 94, helped by a quality score of 86 and a return on equity of 25.4%. Operating margin is a moderate 8.1%. Caution: debt-to-equity is not available, so its borrowing level cannot be checked here.
Applied Industrial Technologies, Inc. AIT
Applied Industrial Technologies has the highest quality score in the group at 95, with operating margin of 11.1% and free cash flow margin of 9.3%. Debt-to-equity is low at 0.26. Caution: its opportunity score of 59 is only middling.
W.W. Grainger, Inc. GWW
W.W. Grainger posts a return on equity of 45.3% and an operating margin of 14.6%, both strong, plus a quality score of 90. Caution: revenue growth was only 4.5% last fiscal year, and its opportunity score is a modest 45.
Fastenal Company FAST
Fastenal has the widest operating margin in this list at 20.5%, a gross margin of 44.6%, and very low debt, with debt-to-equity of 0.11. Revenue growth was 8.7%. Caution: its opportunity score is only 54.
MSC Industrial Direct Co., Inc. MSM
MSC Industrial Direct carries little debt, with debt-to-equity of 0.10, and has a gross margin of 40.8%. Caution: revenue shrank last fiscal year, with growth of -1.3%, and its quality score is a middling 64.
WESCO International, Inc. WCC
WESCO International grew revenue 7.8% last year, but profits are thin: operating margin is 5.4% and free cash flow margin only 0.6%. Caution: debt-to-equity of 1.30 is on the higher side for this group, and gross margin is not available.
DXP Enterprises, Inc. DXPE
DXP Enterprises grew revenue 11.9%, among the faster rates here, with operating margin of 8.8% and return on equity of 17.2%. Caution: debt-to-equity is 1.66, the highest in this list, so it relies more heavily on borrowing.
Pool Corporation POOL
Pool Corporation shows a return on equity of 35.8% and an operating margin of 10.9%. Caution: revenue growth was -0.4%, slightly negative, debt-to-equity of 1.40 is on the higher side, and its opportunity score is 41.
Dnow Inc. DNOW
Dnow grew revenue 18.8% and has a high opportunity score of 80. Caution: its operations lost money last fiscal year, with operating margin of -4.6% and return on equity of -9.0%, and its gross margin of 15.8% is the thinnest here.
Core & Main, Inc. CNM
Core & Main has a quality score of 72, with free cash flow margin of 8.2% and return on equity of 22.6%. Caution: its opportunity score is just 36, which pulls down the Overall score, and debt-to-equity of 1.35 is on the higher side.
Watsco, Inc. WSO
Watsco has a quality score of 77 and a free cash flow margin of 9.6%, which suggests it turns sales into cash fairly well. Caution: revenue fell, with growth of -5.0%, its opportunity score is only 18, and debt-to-equity is unavailable.
Xometry, Inc. XMTR
Xometry grew revenue 25.9% and has the highest opportunity score here at 95. Caution: operating margin is -3.8% and return on equity is -5.2%, so it is not profitable, and its free cash flow margin and debt figures are unavailable.
QXO, Inc. QXO
QXO has an opportunity score of 89 but a quality score of only 32, with a gross margin of 24.0%. Caution: operating margin of -3.4% and return on equity of -4.9% are both negative, and its reported growth figure is unusually large and hard to read as a normal trend.
SiteOne Landscape Supply, Inc. SITE
SiteOne Landscape Supply has a gross margin of 34.9% and a free cash flow margin of 5.2%. Caution: operating margin is just 5.1%, return on equity is 9.4%, and its opportunity score of 10 is the lowest in the list.
Resideo Technologies, Inc. REZI
Resideo Technologies grew revenue 10.5% and has an operating margin of 6.9%. Caution: free cash flow margin is -18.3%, meaning it used more cash than it generated, and its quality score of 23 is the lowest in this list.
Common questions
What does an industrial distribution company do?
These companies act as middlemen between manufacturers and business customers. They stock a wide range of products, such as tools, fasteners, pipes, electrical items and supplies, and deliver them to customers. They earn money from the gap between what they pay for goods and what they charge.
Does a higher Overall score mean a stock is a better investment?
No. The Overall score only shows how a company compares with other companies in its industry today, based on Marvin's rules. It is not a prediction or advice. Check the underlying figures, such as margins, growth and debt, and consider your own goals and risk tolerance.
Why do some stocks have a high opportunity score but a low Overall score?
The Overall score blends several parts, including quality and opportunity. A company can score high on opportunity but low on quality, as Xometry and QXO do here, which lowers its Overall rank. The reverse also happens, as with Watsco, where quality is higher than opportunity.
Keep reading
- Top 15 Industrial Stocks, Ranked by Marvin Scores
- Top 15 Industrials Companies With the Strongest Businesses
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- Top 12 Education & Training Services Stocks
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Marvin's scores (0-100) compare each company with others in its industry today. Growth and margin figures come from SEC filings. This is general information, not personal investment advice or a recommendation to buy or sell anything. Do your own research.