Nintendo (OTCMKTS:NTDOY – Get Free Report) and Japan Tobacco (OTCMKTS:JAPAF – Get Free Report) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, institutional ownership, earnings, valuation, risk and analyst recommendations.
Analyst Ratings
This is a summary of recent ratings for Nintendo and Japan Tobacco, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Nintendo | 1 | 4 | 3 | 1 | 2.44 |
| Japan Tobacco | 0 | 0 | 1 | 0 | 3.00 |
Valuation & Earnings
This table compares Nintendo and Japan Tobacco”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Nintendo | $15.37 billion | 4.69 | $2.80 billion | $0.66 | 21.20 |
| Japan Tobacco | N/A | N/A | N/A | $225.55 | 0.19 |
Nintendo has higher revenue and earnings than Japan Tobacco. Japan Tobacco is trading at a lower price-to-earnings ratio than Nintendo, indicating that it is currently the more affordable of the two stocks.
Dividends
Nintendo pays an annual dividend of $0.32 per share and has a dividend yield of 2.3%. Japan Tobacco pays an annual dividend of $79.70 per share and has a dividend yield of 188.4%. Nintendo pays out 48.5% of its earnings in the form of a dividend. Japan Tobacco pays out 35.3% 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. Japan Tobacco is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Nintendo and Japan Tobacco’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Nintendo | 21.00% | 16.11% | 12.47% |
| Japan Tobacco | N/A | N/A | N/A |
Insider & Institutional Ownership
0.0% of Nintendo shares are held by institutional investors. Comparatively, 24.7% of Japan Tobacco shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Summary
Nintendo beats Japan Tobacco on 7 of the 12 factors compared between the two stocks.
About Nintendo
Nintendo Co., Ltd., together with its subsidiaries, develops, manufactures, and sells home entertainment products in Japan, the Americas, Europe, and internationally. It also offers video game platforms, playing cards, Karuta, and other products; and handheld and home console hardware systems and related software. The company was formerly known as Nintendo Playing Card Co., Ltd. and changed its name to Nintendo Co., Ltd. in 1963. Nintendo Co., Ltd. was founded in 1889 and is headquartered in Kyoto, Japan.
About Japan Tobacco
Japan Tobacco Inc., a tobacco company, manufactures and sells tobacco products, pharmaceuticals, and processed foods in Japan and internationally. The company operates through three segments: Tobacco Business, Pharmaceutical Business, and Processed Food Business. It offers tobacco products, such as cigarettes, heat-not-burn tobacco products, E-vapor products, fine cut tobacco products, cigars, pipes, smokeless tobacco products, and hookah and kretek products. The company provides reduced-risk products, including infused tobacco capsules and heated tobacco sticks. In addition, it researches and develops, manufactures, and sells prescription drugs for the therapeutic areas, such as cardiovascular, kidney and metabolism, immunity/inflammation, and central nervous system. Further, the company provides frozen and room-temperature products, such as frozen udon noodles, packed rice, and frozen okonomiyaki; bakery products; and seasonings, including yeast extracts, assembled, kelp and bonito extracts, and oyster sauces. It offers its products under the Winston, Camel, MEVIUS, and LD brands. Japan Tobacco Inc. was incorporated in 1985 and is headquartered in Tokyo, Japan.
Receive News & Ratings for Nintendo Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Nintendo and related companies with MarketBeat.com's FREE daily email newsletter.
