Itochu (OTCMKTS:ITOCY) & Kohl’s (NYSE:KSS) Financial Survey

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

Dividends

Itochu pays an annual dividend of $0.16 per share and has a dividend yield of 1.1%. Kohl’s pays an annual dividend of $0.50 per share and has a dividend yield of 2.1%. Itochu pays out 17.6% of its earnings in the form of a dividend. Kohl’s pays out 21.8% 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.

Earnings and Valuation

This table compares Itochu and Kohl’s”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	1.22	$5.63 billion	$0.91	16.60
Kohl’s	$15.53 billion	0.18	$272.00 million	$2.29	10.49

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Itochu and Kohl’s, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Itochu	0	1	1	2	3.25
Kohl’s	5	8	2	0	1.80

Kohl’s has a consensus price target of $17.25, suggesting a potential downside of 28.22%. Given Kohl’s’ higher probable upside, analysts clearly believe Kohl’s is more favorable than Itochu.

Profitability

This table compares Itochu and Kohl’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
Kohl’s	1.75%	6.75%	2.02%

Risk & Volatility

Itochu has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, Kohl’s has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500.

Institutional and Insider Ownership

0.1% of Itochu shares are held by institutional investors. Comparatively, 98.0% of Kohl’s shares are held by institutional investors. 1.5% of Kohl’s shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Kohl’s beats Itochu on 10 of the 17 factors compared between the two stocks.

About Itochu

ITOCHU Corporation is a Japanese general trading company that conducts businesses spanning trade, investment and business development. Its activities connect suppliers, manufacturers and customers across a broad range of industries and markets. The company’s businesses include textiles; machinery; metals and minerals; energy and chemicals; food; general products and real estate; and information and communications technology and financial services. Its operations include sourcing and distributing goods, supporting supply chains, and investing in and managing businesses.

About Kohl’s

Kohl’s Corporation is a U.S. department store retailer that sells apparel, footwear, accessories, beauty products and home goods through its stores and e-commerce platform. Its assortment includes national brands and private-label products for families and individuals. The company also offers beauty products through Sephora shops located in many Kohl’s stores, extending its in-store and online shopping selection. Kohl’s serves customers across the United States. The company traces its retail roots to 1962, when founder Maxwell Kohl opened the first Kohl’s department store in Brookfield, Wisconsin.