ODP (NASDAQ:ODP) and Itochu (OTCMKTS:ITOCY) Critical Contrast

ODP (NASDAQ:ODP) and Itochu (OTCMKTS:ITOCY) are both retail/wholesale companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, earnings, profitability, analyst recommendations, risk and valuation.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for ODP and Itochu, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ODP	0	1	0	0	2.00
Itochu	0	0	0	0	0.00

ODP presently has a consensus price target of $28.00, suggesting a potential upside of 55.73%. Given ODP’s stronger consensus rating and higher possible upside, analysts clearly believe ODP is more favorable than Itochu.

Insider and Institutional Ownership

99.6% of ODP shares are held by institutional investors. Comparatively, 0.1% of Itochu shares are held by institutional investors. 3.6% of ODP shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares ODP and Itochu”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ODP	$6.99 billion	0.08	-$3.00 million	($1.39)	-12.94
Itochu	$96.69 billion	0.77	$5.89 billion	$7.66	13.57

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

Profitability

This table compares ODP and Itochu’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ODP	-0.69%	11.50%	2.68%
Itochu	5.93%	13.99%	5.80%

Risk & Volatility

ODP has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500. Comparatively, Itochu has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.

Summary

Itochu beats ODP on 8 of the 13 factors compared between the two stocks.

About ODP

The ODP Corporation provides business services and supplies, products, and digital workplace technology solutions for small, medium, and enterprise businesses in the United States, Puerto Rico, and the U.S. Virgin Islands. The company operates through four divisions: ODP Business Solutions, Office Depot, Veyer, and Varis. The ODP Business Solutions division offers adjacency products, including cleaning, janitorial, and breakroom supplies, office furniture, technology products; and copy and print services through sales force, catalogs, telesales, and through Internet websites. This segment also engages in office supply distribution business. The Office Depot division sells office supplies, technology products and solutions, business machines and related supplies, cleaning, breakroom and facilities products, personal protective equipment, and office furniture; and offers business services, including copying, printing, digital imaging, mailing, shipping, and technology support services through a fully integrated omni-channel platform of 980 Office Depot and OfficeMax retail stores, and through www.officedepot.com. The Veyer division engages in supply chain, distribution, procurement, and global sourcing operations. The Varis division operates tech-enabled B2B indirect procurement marketplace, where buyers and suppliers to transact through the platform's consumer-like buying experience, advanced spend management tools, network of suppliers, and technology capabilities. The company offers its products under various brands, including Office Depot, OfficeMax, and Grand&Toy, as well as others. The ODP Corporation was incorporated in 1986 and is headquartered in Boca Raton, Florida.

About Itochu

ITOCHU Corporation engages in trading and importing/exporting various products worldwide. The company’s Textile segment produces and sells raw materials, threads, and textiles; and garments, home furnishings, and industrial materials, as well as trades in industrial textile and lifestyle products. Its Machinery segment engages in the plants, bridges, railways, and other infrastructure; power generation, transmission, transformation, and sale; water, environment and waste-related; ship trading; renewable and alternative energy; and waste recycling businesses. The company’s Metals & Minerals segment engages in development of metal and mineral resource; processing and steel products; trading of iron ore, coal, pig iron and ferrous raw materials, non-ferrous and light metals, steel products, nuclear fuels, and greenhouse gas emissions; and recycling and waste treatment activities. Its Energy & Chemicals segment trades in crude oil, petroleum products, LPG, LNG, natural gas, hydrogen, organic and inorganic chemicals, functional food, synthetic resins, packaging materials, household goods, fine chemicals, pharmaceuticals, and electronic materials, as well as engages in the solar and biomass power generation, electricity trading, and the energy storage cell businesses. The company’s Food segment produces, distributes, and retails food products. Its General Products & Realty segment produces and sells paper, pulp, natural rubber, tire, and wood products and materials; develops and operates real estate properties, such as housing, logistics facilities, and other projects; and offers logistics services. The company’s ICT & Financial Business segment offers IT, Internet related and venture capital, mobile telephone equipment, BPO, broadcasting and communications, entertainment and content, healthcare and preventive medicine outsourcing, and financial and insurance brokerage services. The company was founded in 1858 and is headquartered in Tokyo, Japan.