Lawson (OTCMKTS:LWSOF – Get Free Report) and Walmart (NYSE:WMT – Get Free Report) are both consumer defensive companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, analyst recommendations and valuation.
Institutional and Insider Ownership
20.1% of Lawson shares are held by institutional investors. Comparatively, 33.2% of Walmart shares are held by institutional investors. 46.5% of Walmart shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This table compares Lawson and Walmart’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Walmart has a consensus target price of $179.00, suggesting a potential upside of 15.26%. Given Walmart’s stronger consensus rating and higher possible upside, analysts clearly believe Walmart is more favorable than Lawson.
Lawson pays an annual dividend of $183.81 per share and has a dividend yield of 369.3%. Walmart pays an annual dividend of $2.28 per share and has a dividend yield of 1.5%. Lawson pays out 45.4% of its earnings in the form of a dividend. Walmart pays out 37.8% 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. Walmart has increased its dividend for 50 consecutive years.
Valuation and Earnings
This table compares Lawson and Walmart’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Walmart||$638.79 billion||0.65||$11.68 billion||$6.03||25.75|
Walmart has higher revenue and earnings than Lawson. Lawson is trading at a lower price-to-earnings ratio than Walmart, indicating that it is currently the more affordable of the two stocks.
Walmart beats Lawson on 12 of the 14 factors compared between the two stocks.
Lawson, Inc. operates and franchises convenience stores under the Lawson, Lawson Store 100, and Natural Lawson names in Japan and internationally. It operates through Domestic Convenience Store Business, Seijo Ishii Business, Entertainment-Related Business, Financial-Related Business, and Overseas Business segments. The company is also involved in the wholesale of processed foods, frozen foods and other meat products, packaging materials, etc.; operation of a chain of supermarkets; and food production and restaurant businesses. In addition, it engages in the development of a general entertainment enterprises; operation of HMV stores, as well as integrated entertainment mall under the Lawson Hot Station L Paca name; construction and operation of movie theater complexes; and consulting and banking businesses. Further, the company is involved in the sale of CDs/DVDs, books/electronic books, and other goods; and entertainment merchandises, such as tickets for concerts, etc. through stores and online. Lawson, Inc. was formerly known as Daiei Convenience Systems, Co. Ltd. and changed its name to Lawson, Inc. in June 1996. The company was incorporated in 1975 and is headquartered in Tokyo, Japan. Lawson, Inc. operates as a subsidiary of Mitsubishi Corporation.
Walmart Inc. engages in the operation of retail, wholesale, and other units worldwide. The company operates through three segments: Walmart U.S., Walmart International, and Sam's Club. It operates supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, and discount stores under Walmart and Walmart Neighborhood Market brands; membership-only warehouse clubs; ecommerce websites, such as walmart.com, walmart.com.mx, walmart.ca, flipkart.com, and samsclub.com; and mobile commerce applications. The company offers grocery and consumables, including dry grocery, snacks, dairy, meat, produce, bakery and deli, alcoholic and nonalcoholic beverages, floral, candy, and other grocery items, as well as dry, chilled, or frozen packaged foods; and health and beauty aids, paper goods, laundry and home care, baby care, pet supplies, and other consumable items. It is also involved in the operation of gasoline stations; provision of tobacco; and health and wellness products covering pharmacy, optical and hearing services, and over-the-counter drugs and other medical products. In addition, the company offers home improvement, outdoor living, gardening, furniture, apparel, jewelry, tools and power equipment, housewares, toys, seasonal items, mattresses, and tire and battery centers; and consumer electronics and accessories, software, video games, office supplies, appliances, and third-party gift cards. Further, it operates digital payment platforms; and offers financial services and related products, including money transfers, bill payments, money orders, check cashing, prepaid access, co-branded credit cards, installment lending, and earned wage access. The company was formerly known as Wal-Mart Stores, Inc. and changed its name to Walmart Inc. in February 2018. Walmart Inc. was founded in 1945 and is based in Bentonville, Arkansas.
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