Snap-On (NYSE:SNA) and Makita (OTCMKTS:MKTAY) Head to Head Comparison

Makita (OTCMKTS:MKTAY) and Snap-On (NYSE:SNA) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Makita and Snap-On, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Makita	0	1	1	1	3.00
Snap-On	1	1	4	0	2.50

Snap-On has a consensus price target of $350.83, suggesting a potential upside of 13.76%. Given Snap-On’s higher probable upside, analysts clearly believe Snap-On is more favorable than Makita.

Risk and Volatility

Makita has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500. Comparatively, Snap-On has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.

Profitability

This table compares Makita and Snap-On’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Makita	10.05%	8.22%	6.92%
Snap-On	21.42%	18.60%	12.78%

Valuation & Earnings

This table compares Makita and Snap-On”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Makita	$4.95 billion	1.60	$521.00 million	$1.82	16.20
Snap-On	$5.11 billion	3.16	$1.04 billion	$19.10	16.15

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

Dividends

Makita pays an annual dividend of $0.09 per share and has a dividend yield of 0.3%. Snap-On pays an annual dividend of $8.56 per share and has a dividend yield of 2.8%. Makita pays out 4.9% of its earnings in the form of a dividend. Snap-On pays out 44.8% 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. Snap-On has raised its dividend for 15 consecutive years. Snap-On is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

84.9% of Snap-On shares are owned by institutional investors. 1.0% of Makita shares are owned by insiders. Comparatively, 3.9% of Snap-On shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Snap-On beats Makita on 14 of the 18 factors compared between the two stocks.

About Makita

Makita Corporation engages in the manufacture and sale of electric power tools, pneumatic tools, and gardening and household equipment in Japan, Europe, North America, Asia, Australia, Brazil, and the United Arab Emirates. It offers cordless, drilling/fastening, impact drilling/demolition, grinding/sanding, sawing, planning/routering, pneumatic, outdoor power, and dust extraction/other equipment, as well as accessories; and cutting equipment for new materials, masonry, and metals. The company was formerly known as Makita Electric Works, Ltd. and changed its name to Makita Corporation in April 1991. Makita Corporation was founded in 1915 and is headquartered in Anjo, Japan.

About Snap-On

Snap-on Incorporated manufactures and markets tools, equipment, diagnostics, and repair information and systems solutions for professional users worldwide. It operates through Commercial & Industrial Group, Snap-on Tools Group, Repair Systems & Information Group, and Financial Services segments. The company provides hand tools, including wrenches, sockets, ratchet wrenches, pliers, screwdrivers, punches and chisels, saws and cutting tools, pruning tools, torque measuring instruments, and other related products; power tools, such as cordless, pneumatic, and hydraulic and corded tools; and tool storage products comprising tool chests, roll cabinets, and other products. It provides handheld and computer-based diagnostic products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems and services, point-of-sale systems, integrated systems for vehicle service shops, original equipment manufacturer purchasing facilitation services, and warranty management systems and analytics; and engineered solutions. In addition, the company offers solutions for the service of vehicles and industrial equipment that include wheel alignment equipment, wheel balancers, tire changers, vehicle lifts, test lane equipment, collision repair equipment, vehicle air conditioning service equipment, brake service equipment, fluid exchange equipment, transmission troubleshooting equipment, safety testing equipment, battery chargers, and hoists, as well as after-sales support services and training programs. Further, it provides financing programs to facilitate the sales of its products and support its franchise business. It serves the aviation and aerospace, agriculture, infrastructure construction, government and military, mining, natural resources, power generation, and technical education industries. Snap-on Incorporated was incorporated in 1920 and is headquartered in Kenosha, Wisconsin.