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1. Company Snapshot

1.a. Company Description

MRC Global Inc., through its subsidiaries, distributes pipes, valves, fittings, and other infrastructure products and services to the energy, industrial, and gas utility end-markets in the United States, Canada, and internationally.It offers ball, butterfly, gate, globe, check, diaphragm, needle, and plug valves; and other products, such as lined corrosion resistant piping systems, control valves, valve automation, and top work components, as well as valve modification services; and measurement, steam, and instrumentation products.The company also provides carbon steel fittings and flanges comprising carbon weld fittings, flanges, and piping components; stainless steel, alloy and corrosion resistant pipes, tubing, fittings, and flanges; and carbon line pipes.


In addition, it offers natural gas distribution products, including risers, meters, polyethylene pipes and fittings, and various other components and industrial supplies; oilfield and industrial supplies and completion equipment, such as high density polyethylene pipes, fittings, and rods; and specialized production equipment comprising tanks and separators.Further, the company provides various services, such as product testing, manufacturer assessments, multiple daily deliveries, volume purchasing, inventory and zone store management and warehousing, technical support, training, just-in-time delivery, truck stocking, order consolidation, product tagging and system interfaces, and valve inspection and repair services; and various other services under the ValidTorque and FastTrack names.Its products are used in the construction, maintenance, repair, and overhaul of equipment used in extreme operating conditions, including high pressure, high/low temperature, and high corrosive and abrasive environments.


The company was formerly known as McJunkin Red Man Holding Corporation and changed its name to MRC Global Inc.in January 2012.MRC Global Inc.


was founded in 1921 and is headquartered in Houston, Texas.

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1.b. Last Insights on MRC

MRC Global's recent performance was driven by several positive factors. The company's strong prospects in the gas utility sector and data center demand contributed to its growth. Additionally, MRC Global's focus on shareholder returns through buybacks and dividends has been a key driver of its performance. The company's recent earnings release highlighted its strong start to the year, with activity levels and margins exceeding expectations. Furthermore, the announcement of a definitive merger agreement with DNOW Inc. valued at approximately $1.5 billion, inclusive of MRC Global's net debt, is a significant positive development for the company. This combination will create a premier energy and industrial solutions provider, bringing together two global energy and industrial infrastructure organizations.

1.c. Company Highlights

2. MRC Global Delivers Strong Q1 2025 Earnings with Revenue and Backlog Growth

MRC Global reported a robust first quarter, exceeding expectations with revenue of $712 million, up 7% sequentially, and adjusted EBITDA of $36 million, or 5.1% of sales. The company also posted a net income from continuing operations of $8 million, or $0.09 per diluted share, surpassing the consensus estimate of $0.08. The strong performance was driven by growth across all three business sectors—Gas Utilities, DIET, and PTI—with backlog increasing 8% to $603 million, reflecting broad-based demand.

Publication Date: May -08

📋 Highlights
  • Revenue Growth: - Q1 revenue was $712 million, up 7% sequentially, with growth across all sectors.
  • Backlog Increase: - Backlog rose 8% to $603 million, with gas utilities up 26% and US segment up 23% by April.
  • Gross Margins and EBITDA: - Gross margin of 21.5% and adjusted EBITDA of $36 million, reflecting strong profitability.
  • Share Repurchase: - Initiated a $125 million buyback program, with a net debt leverage ratio of 1.7 times and $570 million in liquidity.
  • Sector Growth Initiatives: - Gas utilities thrived with a 26% backlog increase, while data centers and mining showed $10 million+ commitments.

Gas Utilities Sector Leads the Charge

The Gas Utilities sector, MRC Global's largest end market, saw a 26% year-to-date increase in backlog, driven by natural gas infrastructure modernization and LNG export projects. CEO Rob Saltiel noted, "We are seeing a resurgence in the gas utilities business, which is less exposed to tariffs and offers significant opportunities for market share and wallet share growth." This sector's resilience is further supported by strong natural gas pricing and customer investments in safety and electrification projects.

Growth Initiatives and Strategic Investments

MRC Global is actively pursuing growth opportunities in emerging markets such as data centers and mining. The company has secured over $10 million in commitments for data center projects, with potential for this segment to grow into a $50-100 million business. Additionally, the mining sector is expected to see a 10% compound annual growth rate over the next three to five years. Management is also mitigating tariff impacts through strategic sourcing and supply chain optimization, with over 60% of US products now sourced domestically.

Valuation and Financial Health

With a net debt leverage ratio of 1.7 times and $570 million in available liquidity, MRC Global maintains a healthy balance sheet. The company is executing a $125 million share repurchase program, reflecting confidence in its financial strength. Valuation metrics indicate the stock is trading at a P/E ratio of 19.33 and a P/S ratio of 0.36, suggesting moderate growth expectations are priced in. The free cash flow yield of 23.05% highlights the company's ability to generate strong cash flow, supporting its capital allocation strategy and growth initiatives.

Outlook and Risks

MRC Global maintained its full-year guidance for low to high single-digit revenue growth, with the Gas Utilities sector expected to be the most resilient. However, the company faces risks from tariff uncertainties and potential slower growth in the DIET sector if projects are delayed. Management remains cautious but optimistic, with a strong start to 2025 positioning the company well for continued growth and profitability.

3. NewsRoom

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Geode Capital Management LLC Acquires 27,089 Shares of MRC Global Inc. $MRC

Nov -29

Source: defenseworld.net

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Campbell & CO Investment Adviser LLC Makes New Investment in MRC Global Inc. $MRC

Nov -18

Source: defenseworld.net

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INTEGRAL AD SCIENCE EARNS MRC ACCREDITATION FOR REPORTING OF IMPRESSIONS, VIEWABILITY AND INVALID TRAFFIC ON AMAZON PROPERTIES

Nov -13

Source: prnewswire.com

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Teacher Retirement System of Texas Reduces Holdings in MRC Global Inc. $MRC

Nov -06

Source: defenseworld.net

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MRC Global (MRC) Q3 Earnings and Revenues Lag Estimates

Nov -05

Source: zacks.com

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MRC Global Announces Third Quarter 2025 Results

Nov -05

Source: globenewswire.com

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DNOW Announces Future Leadership Team for Combined Company

Oct -13

Source: businesswire.com

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Y-MABS THERAPEUTICS INVESTOR ALERT BY THE FORMER ATTORNEY GENERAL OF LOUISIANA: Kahn Swick & Foti, LLC Investigates Adequacy of Price and Process in Proposed Sale of Y-mAbs Therapeutics, Inc. - YMAB

Aug -20

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.18%)

6. Segments

Valves, Automation, Measurement and Instrumentation

Expected Growth: 4.5%

MRC Global Inc.'s 4.5% growth in Valves, Automation, Measurement and Instrumentation is driven by increasing demand for process optimization, energy efficiency, and safety in industries such as oil and gas, chemical, and power generation. Additionally, growing adoption of IoT and digitalization in industrial automation, and rising need for accurate measurement and control systems also contribute to this growth.

Gas Products

Expected Growth: 3.8%

MRC Global Inc.'s Gas Products segment growth of 3.8% is driven by increasing demand for natural gas infrastructure, rising energy consumption, and growing investments in midstream infrastructure. Additionally, the company's strategic acquisitions and expansion into new markets have contributed to the segment's growth.

Line Pipe

Expected Growth: 4.2%

The 4.2% growth in Line Pipe from MRC Global Inc. is driven by increasing demand from the oil and gas industry, particularly in the Permian Basin, coupled with rising investments in midstream infrastructure projects. Additionally, the company's strategic expansion into new markets and its focus on providing high-quality products have contributed to its growth momentum.

Carbon Steel Fittings and Flanges

Expected Growth: 4.1%

MRC Global Inc.'s Carbon Steel Fittings and Flanges segment growth of 4.1% is driven by increasing demand from the oil and gas industry, infrastructure development, and replacement of aging pipelines. Additionally, growing adoption of carbon steel in construction and industrial applications, coupled with the company's strategic expansion into new markets, contributes to the segment's growth.

General Products

Expected Growth: 3.9%

MRC Global Inc.'s General Products segment growth of 3.9% is driven by increasing demand from midstream and downstream oil and gas customers, expansion into new geographic markets, and strategic acquisitions. Additionally, the company's focus on digital transformation and e-commerce platform enhancements has improved customer experience, leading to increased sales and revenue growth.

Stainless Steel Alloy Pipe and Fittings

Expected Growth: 4.3%

The 4.3% growth of Stainless Steel Alloy Pipe and Fittings from MRC Global Inc. is driven by increasing demand from the oil and gas industry, rising adoption in chemical processing and power generation, and growing need for corrosion-resistant pipes in harsh environments. Additionally, infrastructure development and government initiatives in water treatment and desalination plants also contribute to the growth.

7. Detailed Products

Valves

MRC Global Inc. offers a wide range of valves for various industrial applications, including gate valves, globe valves, check valves, and ball valves.

Fittings

The company provides a variety of fittings, including elbows, tees, couplings, and adapters, for connecting and directing pipes.

Pipe

MRC Global Inc. offers a range of pipes, including carbon steel, stainless steel, and specialty pipes, for various industrial applications.

Automation and Instrumentation

The company provides automation and instrumentation products, including sensors, transmitters, and control valves, for process control and monitoring.

Measurement and Analytics

MRC Global Inc. offers measurement and analytics products, including flow meters, level transmitters, and analytical instruments, for process monitoring and optimization.

Valve Automation

The company provides valve automation products, including electric and pneumatic actuators, for automating valve operation.

Pipeline and Facility Supplies

MRC Global Inc. offers pipeline and facility supplies, including pipe coatings, insulation, and cathodic protection systems, for pipeline construction and maintenance.

8. MRC Global Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

MRC Global Inc. operates in the oil and gas industry, which has a moderate threat of substitutes. While there are some alternatives to traditional oil and gas, such as renewable energy sources, they are not yet widely adopted and do not pose a significant threat to the company's operations.

Bargaining Power Of Customers

MRC Global Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are often customized to meet specific customer needs, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

MRC Global Inc. relies on a network of suppliers to provide the materials and components needed for its products. While the company has some bargaining power due to its size and scale, suppliers also have some leverage due to the specialized nature of the products.

Threat Of New Entrants

The oil and gas industry has significant barriers to entry, including high capital costs, complex regulatory requirements, and the need for specialized expertise. These barriers make it difficult for new entrants to enter the market and compete with established players like MRC Global Inc.

Intensity Of Rivalry

The oil and gas industry is highly competitive, with many established players competing for market share. MRC Global Inc. faces intense competition from other distributors and manufacturers, which can lead to pricing pressure and reduced margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 28.44%
Debt Cost 8.24%
Equity Weight 71.56%
Equity Cost 13.97%
WACC 12.34%
Leverage 39.74%

11. Quality Control: MRC Global Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Profire Energy

A-Score: 5.6/10

Value: 5.2

Growth: 7.1

Quality: 8.0

Yield: 0.0

Momentum: 9.5

Volatility: 4.0

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NESR

A-Score: 4.9/10

Value: 6.4

Growth: 6.1

Quality: 5.2

Yield: 0.0

Momentum: 8.5

Volatility: 3.0

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MRC Global

A-Score: 4.5/10

Value: 6.8

Growth: 5.2

Quality: 2.9

Yield: 0.0

Momentum: 6.5

Volatility: 5.7

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RPC

A-Score: 4.5/10

Value: 7.0

Growth: 5.8

Quality: 5.1

Yield: 4.0

Momentum: 1.0

Volatility: 4.0

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Helix Energy Solutions

A-Score: 3.6/10

Value: 6.9

Growth: 4.9

Quality: 4.5

Yield: 0.0

Momentum: 1.5

Volatility: 4.0

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ProPetro Holding

A-Score: 2.3/10

Value: 5.4

Growth: 3.8

Quality: 2.1

Yield: 0.0

Momentum: 1.0

Volatility: 1.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

13.78$

Current Price

13.78$

Potential

-0.00%

Expected Cash-Flows