Head to Head Analysis: Itochu (OTCMKTS:ITOCY) & Shoprite (OTCMKTS:SRGHY)

Itochu (OTCMKTS:ITOCY) and Shoprite (OTCMKTS:SRGHY) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, analyst recommendations, institutional ownership and dividends.

Valuation and Earnings

This table compares Itochu and Shoprite”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Itochu	$98.47 billion	1.00	$5.63 billion	$0.93	13.40
Shoprite	N/A	N/A	N/A	$6.97	2.70

Itochu has higher revenue and earnings than Shoprite. Shoprite is trading at a lower price-to-earnings ratio than Itochu, indicating that it is currently the more affordable of the two stocks.

Dividends

Itochu pays an annual dividend of $0.16 per share and has a dividend yield of 1.3%. Shoprite pays an annual dividend of $4.22 per share and has a dividend yield of 22.4%. Itochu pays out 17.2% of its earnings in the form of a dividend. Shoprite pays out 60.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Institutional and Insider Ownership

0.1% of Itochu shares are owned by institutional investors. Comparatively, 0.0% of Shoprite shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Itochu and Shoprite’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Itochu	N/A	N/A	N/A
Shoprite	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Itochu and Shoprite, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Itochu	0	1	1	2	3.25
Shoprite	0	0	1	0	3.00

Summary

Itochu beats Shoprite on 6 of the 8 factors compared between the two stocks.

About Itochu

ITOCHU Corporation engages in trading and importing/exporting various products worldwide. The company’s Textile segment produces and sells raw materials, threads, and textiles; and garments, home furnishings, and industrial materials, as well as trades in industrial textile and lifestyle products. Its Machinery segment engages in the plants, bridges, railways, and other infrastructure; power generation, transmission, transformation, and sale; water, environment and waste-related; ship trading; renewable and alternative energy; and waste recycling businesses. The company’s Metals & Minerals segment engages in development of metal and mineral resource; processing and steel products; trading of iron ore, coal, pig iron and ferrous raw materials, non-ferrous and light metals, steel products, nuclear fuels, and greenhouse gas emissions; and recycling and waste treatment activities. Its Energy & Chemicals segment trades in crude oil, petroleum products, LPG, LNG, natural gas, hydrogen, organic and inorganic chemicals, functional food, synthetic resins, packaging materials, household goods, fine chemicals, pharmaceuticals, and electronic materials, as well as engages in the solar and biomass power generation, electricity trading, and the energy storage cell businesses. The company’s Food segment produces, distributes, and retails food products. Its General Products & Realty segment produces and sells paper, pulp, natural rubber, tire, and wood products and materials; develops and operates real estate properties, such as housing, logistics facilities, and other projects; and offers logistics services. The company’s ICT & Financial Business segment offers IT, Internet related and venture capital, mobile telephone equipment, BPO, broadcasting and communications, entertainment and content, healthcare and preventive medicine outsourcing, and financial and insurance brokerage services. The company was founded in 1858 and is headquartered in Tokyo, Japan.

About Shoprite

Shoprite Holdings Ltd, an investment holding company, primarily engages in the food retailing business in South Africa and internationally. The company operates through four segments: Supermarkets RSA, Supermarkets Non-RSA, Furniture, and Other Operating segments. It also offers clothing, general merchandise, cosmetics, and liquor products; furniture and home entertainment products; and electrical and household appliances. In addition, the company distributes various pharmaceutical products and surgical equipment to pharmacies, hospitals, clinics, dispensing doctors, and veterinary surgeons. It operates stores under the Shoprite, Checkers, Checkers Hyper, Usave, Checkers Foods, OK Furniture, OK Power Express, House & Home, Shoprite LiquorShop, OK, Checkers LiquorShop, MediRite, Sentra, Megasave, OK Liquor, UNIQ, Petshop Science, Checkers Outdoor, Transpharm, Checkers Little Me, K'nect, Computicket, and Checkers Sixty60 brands. The company also operates franchise stores. Further, the company provides ticketing, and car rental and accommodation services; stadium management, capacity management, travel management, and access control solutions; and credit financing, financial, and treasury management services. Additionally, it invests in properties; and sells products to franchisees under drop-shipment arrangements. Shoprite Holdings Ltd was incorporated in 1936 and is based in Brackenfell, South Africa.