This article was first published July 15, 2019 on Seeking Alpha.
In this article, I write about MSC Industrial Direct Co., Inc. (MSM), another potential stock suitable for a dividend growth investor. MSC Industrial is not that well-known especially compared to its larger competitors like Fastenal Company (FAST) and W.W. Grainger, Inc. (GWW) due to their dividend track record and consistency in returning cash to shareholders. But saying that, MSC Industrial recently raised the dividend 19% and the forward dividend yield is now over 4%. This yield is much greater than the company’s competitors. Furthermore, the current stock price of ~$69.55 has declined over 10% YTD. The stock price is also down significantly from its peak of ~$106 in early 2017 due to tariffs, trade wars, and a slowdown in worldwide industrial activity. Based on expected 2019 EPS, MSC Industrial is undervalued relative to its 10-year P/E multiple. Hence, I view this stock as a buy for patient investors.