Critical Review: Sumitomo (OTCMKTS:SSUMY) versus Marubeni (OTCMKTS:MARUY)

Marubeni (OTCMKTS:MARUY) and Sumitomo (OTCMKTS:SSUMY) are both large-cap industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, profitability and earnings.

Dividends

Marubeni pays an annual dividend of $0.56 per share and has a dividend yield of 1.8%. Sumitomo pays an annual dividend of $0.19 per share and has a dividend yield of 1.7%. Marubeni pays out 24.6% of its earnings in the form of a dividend. Sumitomo pays out 22.9% 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.

Analyst Ratings

This is a summary of recent ratings and price targets for Marubeni and Sumitomo, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Marubeni	0	2	0	0	2.00
Sumitomo	0	0	0	1	4.00

Risk and Volatility

Marubeni has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, Sumitomo has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500.

Institutional and Insider Ownership

0.1% of Marubeni shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Marubeni and Sumitomo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Marubeni	6.62%	13.08%	5.64%
Sumitomo	8.23%	12.71%	4.75%

Earnings and Valuation

This table compares Marubeni and Sumitomo”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Marubeni	$54.91 billion	0.93	$3.59 billion	$2.28	13.44
Sumitomo	$48.74 billion	1.07	$3.77 billion	$0.83	13.19

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

About Marubeni

Marubeni Corporation engages in various business activities. It manufactures, wholesales, and retails apparel, footwear, home furnishing and sport goods, industrial and textile materials, tire and rubber materials, and household and nursing care products; develops uranium, nuclear fuel cycle, iron ore, coking coal, copper mines, and related equipment and services; smelts and refines aluminum and magnesium; leases temporary steel construction materials; explores for, develops, and produces oil and gas; manages infrastructure funds; and develops and manages real estate. The company also offers insurance, technical, ICT, and logistic services; agri-inputs; fertilizer and crop protection product contracting services; crop protection product formulations; wood chips, biomass fuels, pulp and waste papers, paper, paperboards, sanitary, and building and construction materials; engineering, procurement, and construction services; and operation and maintenance services. It trades in fertilizers, dairy, agricultural, and marine products; sugar, processed food, beverages raw materials, and commercial use food materials; grains, oilseeds, feed ingredients, compound feeds, fresh and processed meat, petrochemicals, plastics, salts, chlor-alkalis, life science products, electronic materials, fertilizer materials, and inorganic mineral resources and chemicals; steelmaking raw materials, ferroalloys, nonferrous metals, and steel products; cement and ingots related materials; and petroleum and LPG. The company engages in infrastructure; water; automotive finance; power generation; power service and retail; natural gas; hydrogen; and fuel ammonia businesses. It owns, purchases, operates, leases, sells, and charters aerospace and ship products; leases refrigerated trailers, commercial vehicles, and freight cars; and sells, trades in, leases, finances, and services construction and industrial machinery, and mobility products. The company was founded in 1858 and is based in Tokyo, Japan.

About Sumitomo

Sumitomo Corporation engages in general trading business worldwide. It operates through six segments: Metal Products; Transportation & Construction Systems; Infrastructure; Media & Digital; Living Related & Real Estate; and Mineral Resources, Energy, Chemical & Electronics. The company provides steel sheets and tubular products; and manufactures, leases, sells, services, and finances ships, aircrafts, motor vehicles, construction equipment, and components and parts. It is involved in the development of renewable energy projects comprising power generation and power plant engineering, procurement, and construction activities; electricity retail; industrial facilities and equipment, water, transportation systems and infrastructure, airports, smart city project, environmental solutions, and storage battery businesses; development and operation of industrial parks; arranging insurance; and provision of logistics services. In addition, the company engages in the cable television, 5G related technologies, programming distribution, movies, digital media and video content, TV shopping, and e-commerce businesses; cell phone, ICT platform, digital solution, and venture capital businesses; provision of smart communications infrastructure; operation of food supermarkets and drugstore chains; trade of cement and building materials; and real estate businesses. Further, it develops and trades in coal, iron ore, manganese, uranium, non-ferrous and precious metals, petroleum, natural gas and liquefied natural gas, and commodity derivative transactions; trades in non-ferrous metal products, liquefied petroleum gas, storage batteries, carbon products, plastics, organic and inorganic chemicals, silicon wafers, LEDs, pharmaceuticals, agricultural chemicals, household insecticides, fertilizers, and veterinary drugs; engages in the investing activities; and provides electronics manufacturing services. Sumitomo Corporation was incorporated in 1919 and is headquartered in Tokyo, Japan.