Morrisons (MRWSY) vs. KAO (KCRPY) Critical Contrast

Morrisons (OTCMKTS: MRWSY) and KAO (OTCMKTS:KCRPY) are both retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, valuation, earnings, profitability, institutional ownership and dividends.

Risk & Volatility

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Morrisons has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, KAO has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500.

Dividends

Morrisons pays an annual dividend of $0.31 per share and has a dividend yield of 1.9%. KAO pays an annual dividend of $0.91 per share and has a dividend yield of 1.2%. Morrisons pays out 39.7% of its earnings in the form of a dividend. KAO pays out 34.2% 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.

Profitability

This table compares Morrisons and KAO’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Morrisons N/A N/A N/A
KAO N/A N/A N/A

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Morrisons and KAO, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Morrisons 0 2 2 0 2.50
KAO 0 0 0 0 N/A

Valuation and Earnings

This table compares Morrisons and KAO’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Morrisons $22.45 billion 0.35 $404.52 million $0.78 21.37
KAO $13.29 billion 2.72 $1.31 billion $2.66 27.47

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

Insider and Institutional Ownership

0.2% of Morrisons shares are held by institutional investors. Comparatively, 0.1% of KAO shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Morrisons beats KAO on 5 of the 9 factors compared between the two stocks.

Morrisons Company Profile

Wm Morrison Supermarkets PLC operates retail super stores under the Morrisons brand name in the United Kingdom. The company is involved in in-store and online grocery retailing. It operates through 491 stores. The company is also involved in the manufacture and distribution of fresh food products; preparation and supply of seafood; processing of fresh meat; manufacture and distribution of morning goods and breads; investment, development, maintenance, and management of properties; produce packaging and purchasing; and the provision of leasing services. In addition, it engages in the operation of 334 petrol filling stations; 118 pharmacies; and 401 cafes, as well as online stores. Wm Morrison Supermarkets PLC was founded in 1899 and is headquartered in Bradford, the United Kingdom.

KAO Company Profile

Kao Corporation develops and sells consumer and chemical products in Japan and internationally. The company operates through four segments: Beauty Care Business, Human Health Care Business, Fabric and Home Care Business, and Chemical Business. The Beauty Care Business segment offers cosmetics; skin and body care products, such as facial and body cleansers; and hair care products, including shampoos and conditioners, and hair styling agents, as well as hair coloring and permanent wave products under the Sofina, Kanebo, Molton Brown, Bioré, Jergens, Asience, John Frieda, and Goldwell brands. The Human Health Care Business segment provides functional health beverages; feminine and baby care products, such as sanitary napkins and baby diapers; and oral care products under the Laurier, Merries, Pyuora, Clear Clean, and Bub brand names. The Fabric and Home Care Business segment offers fabric care products, including laundry detergents, fabric softeners, and bleaching agents; and home care products comprising dishwashing detergents and house cleaning products under the Attack, Haiter, Magiclean, Humming, Family, CuCute, and Quickle brand names. The Chemical Business segment provides oleo chemicals; performance chemicals; specialty chemicals; and fat and oil derivatives and surfactants, functional polymers, and fragrances under the KALCOL, EMAL, MIGHTY, and TUFTONE brands. This segment serves the paper and pulp, food products, pharmaceutical products, electronics, civil engineering and construction, information media, electronics, and other industries. The company was formerly known as Kao Soap Co., Ltd. and changed its name to Kao Corporation in 1982. Kao Corporation was founded in 1887 and is headquartered in Tokyo, Japan.

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