Among management teams that are good stewards of investors' capital, Grainger (NYSE:GWW) more than merits a mention. Some folks may question whether operating as a "middleman" remains a viable business model, but in my opinion, you don't post solid double-digit returns on capital without doing more than a few things right.

That said, the first quarter wasn't quite as good as first meets the eye. Revenue was up 6% and slightly below the average analyst projection. Operating income was reported up 19%, and EPS were reported up 18%, but $0.05 of that figure was due to the implementation of new software that allowed the company to recognize inventory items sooner than before. Without that benefit, EPS growth would have been 11%, and earnings would have matched forecasts.

The company also decided to change how it presents its segment information. Sometimes that's a warning flag, so be advised. In any case, we see that the Grainger branch-based business posted solid operating income growth; their previously discussed market expansion programs made meaningful contributions to revenue.

The other two segments might deserve a little more discussion. The lab safety business isn't growing too quickly (revenue up 8% organically, earnings up 12%). Still, it's highly profitable and earns a very good return on capital, though management seems to use a somewhat different formula for ROIC than I do. Last but not least, the Canadian Acklands-Grainger business grew revenue at a 19% clip and operating earnings at 18%. There's still considerable opportunity for improvement here; both margins and returns on capital are far lower than in the other two businesses.

Given that Grainger was slower in getting its catalog out this year, the next quarter could see a nice little boost to revenue. I also still think that Grainger is the cheapest of the supply businesses I follow. That list that includes Applied Industrial (NYSE:AIT), Fastenal (NASDAQ:FAST), and WESCO (NYSE:WCC), among others. Nonetheless, it's not my favorite in the space; I'd much prefer to wait for a more substantial discount to fair value before investing here myself.

For further Foolish parts and pieces:

Fool contributor Stephen Simpson owns shares of MSC Industrial, but has no financial interest in any other stocks mentioned (that means he's neither long nor short the shares). The Fool's disclosure policy uses only the highest-quality components.