Here's Why You Should Retain Grainger Stock in Your Portfolio

Growth Drivers - The company is benefiting from volume growth in the High Touch Solutions segment and customer growth in the Endless Assortment segment [1] - The High-Touch Solutions segment is gaining from an improved product mix, while repeat customer growth at MonotaRO is aiding the Endless Assortment segment [1] - Volume improvement and pricing actions are driving the company's performance [2] - The High-Touch Solutions North America segment is experiencing continued volume growth across all geographies and strong price realization, with gross margin driven by an improved product mix [3] - The Endless Assortment segment is supported by customer acquisition and repeat customer growth at MonotaRO [3] - The High-Touch Solutions model serves customers with complex buying needs, primarily in North America, creating tailored solutions and deep customer relationships [4] - The company creates value through sales and service representatives, technical product support, fulfillment capabilities, and inventory management solutions [5] - The High-Touch Solutions market outperformed the U S MRO market in all quarters of 2023 and the first two quarters of 2024 [5] - The company is focused on re-engaging lapsed customers and acquiring new ones, with continued growth among large and mid-sized customers in the United States [5] Strategic Initiatives - The company is investing in e-commerce and digital capabilities to improve the end-to-end customer experience [6] - Grainger is executing improvement initiatives within its supply chain and developing online capabilities for a personalized customer experience through Grainger com, eProcurement connections, and mobile applications [6] - Effective inventory management and incremental investments in marketing and merchandising are driving profitability [7] Near-Term Challenges - The company is experiencing higher SG&A expenses due to increased headcount, compensation costs, and marketing investments, which may affect margins in upcoming quarters [8] - Product shortages, delays, overseas freight pressures, port congestion, container challenges, and rising fuel prices are driving costs [9] Stock Performance - Grainger's shares have gained 28% in the past year, outperforming the industry's growth of 10 1% [10] Industry Comparison - Graham Corporation (GHM) has a Zacks Rank 1 (Strong Buy) with an average trailing four-quarter earnings surprise of 101 85% and a 127% share price increase in a year [13] - Applied Industrial Technologies (AIT) has a Zacks Rank 2 (Buy) with an average trailing four-quarter earnings surprise of 4 9% and a 46 4% share price increase in a year [14] - Tenaris S A (TS) has a Zacks Rank 2 (Buy) with an average trailing four-quarter earnings surprise of 24 5% and a 25 5% share price increase in a year [14]