Financial Comparison: MercadoLibre (NASDAQ:MELI) vs. Monotaro (OTCMKTS:MONOY)

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

Institutional & Insider Ownership

87.6% of MercadoLibre shares are owned by institutional investors. Comparatively, 0.1% of Monotaro shares are owned by institutional investors. 0.3% of MercadoLibre shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

MercadoLibre has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500. Comparatively, Monotaro has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for MercadoLibre and Monotaro, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MercadoLibre	0	2	14	1	2.94
Monotaro	0	1	0	0	2.00

MercadoLibre presently has a consensus target price of $2,795.00, suggesting a potential upside of 18.89%. Given MercadoLibre’s stronger consensus rating and higher possible upside, equities research analysts plainly believe MercadoLibre is more favorable than Monotaro.

Earnings & Valuation

This table compares MercadoLibre and Monotaro”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MercadoLibre	$20.78 billion	5.74	$1.91 billion	$40.49	58.06
Monotaro	$1.91 billion	N/A	$173.82 million	$0.48	38.59

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

Profitability

This table compares MercadoLibre and Monotaro’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MercadoLibre	8.52%	43.06%	7.57%
Monotaro	9.36%	35.15%	25.50%

Summary

MercadoLibre beats Monotaro on 12 of the 14 factors compared between the two stocks.

About MercadoLibre

MercadoLibre, Inc. operates online commerce platforms in the United States. It operates Mercado Libre Marketplace, an automated online commerce platform that enables businesses, merchants, and individuals to list merchandise and conduct sales and purchases digitally; and Mercado Pago FinTech platform, a financial technology solution platform, which facilitates transactions on and off its marketplaces by providing a mechanism that allows its users to send and receive payments online, as well as allows users to transfer money through their websites or on the apps. The company also offers Mercado Fondo that allows users to invest funds deposited in their Mercado Pago accounts; Mercado Credito, which extends loans to certain merchants and consumers; and Mercado Envios logistics solution that enables sellers on its platform to utilize third-party carriers and other logistics service providers, as well as fulfillment and warehousing services for sellers. In addition, it provides Mercado Libre Classifieds, an online classified listing service, where users can list and purchase motor vehicles, real estate, and services; Mercado Ads, an advertising platform, which enables large retailers and brands to promote their products and services on the web; and Mercado Shops, an online storefronts solution that enables users to set-up, manage, and promote their own digital stores. The company was incorporated in 1999 and is headquartered in Montevideo, Uruguay.

About Monotaro

MonotaRO Co., Ltd., together with its subsidiaries, operates an online MRO products store in Japan and internationally. The company offers safety protective equipment, work clothes, and safety shoes; logistics, storage, and packing supplies; tapes; safety, disaster prevention, and crime prevention products; safety signs; ship and fishing supplies; office supplies; office furniture/lighting/cleaning supplies; cutting tools and abrasives; measurement and surveying equipment; hand tools/electric and pneumatic tools; sprays, oils, greases, and paints; adhesives and repair materials; welding supplies; and piping and water related components/pumps/pneumatic and hydraulic equipment/hoses. It also provides mechanical parts; control equipment; soldering and anti-static products; architectural hardware, building materials, painting, and interior supplies; air conditioning and electrical equipment; electrical materials; screws, bolts, nails, and materials; automotive supplies; truck supplies; motorcycle supplies; bicycle supplies; scientific research and development supplies; clean room supplies; kitchen equipment and store supplies; agricultural and gardening supplies; and medical and nursing supplies. It serves factories, construction, automobile maintenance, and other industries. The company was formerly known as Sumisho Grainger Co., Ltd. and changed its name to MonotaRO Co., Ltd. in February 2006. The company was incorporated in 2000 and is headquartered in Osaka, Japan. MonotaRO Co., Ltd. operates as a subsidiary of Grainger Global Holdings, Inc.