Critical Analysis: Sumitomo (OTCMKTS:SSUMY) versus Scully Royalty (NYSE:SRL)

Sumitomo (OTCMKTS:SSUMY) and Scully Royalty (NYSE:SRL) are both multi-sector conglomerates companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, dividends and risk.

Institutional and Insider Ownership

42.0% of Scully Royalty shares are owned by institutional investors. 1.9% of Scully Royalty shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Sumitomo has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500. Comparatively, Scully Royalty has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500.

Valuation & Earnings

This table compares Sumitomo and Scully Royalty”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sumitomo	$47.89 billion	0.75	$3.71 billion	$3.37	8.75
Scully Royalty	$25.77 million	3.06	-$15.02 million	N/A	N/A

Sumitomo has higher revenue and earnings than Scully Royalty.

Dividends

Sumitomo pays an annual dividend of $0.77 per share and has a dividend yield of 2.6%. Scully Royalty pays an annual dividend of $0.26 per share and has a dividend yield of 4.9%. Sumitomo pays out 22.8% of its earnings in the form of a dividend. Scully Royalty has raised its dividend for 1 consecutive years. Scully Royalty is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Sumitomo and Scully Royalty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sumitomo	8.31%	12.70%	5.33%
Scully Royalty	N/A	N/A	N/A

Analyst Ratings

This is a summary of current ratings and target prices for Sumitomo and Scully Royalty, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sumitomo	0	0	0	1	4.00
Scully Royalty	0	0	0	0	0.00

About Sumitomo

Sumitomo Corporation engages in general trading business worldwide. It operates through six segments: Metal Products; Transportation & Construction Systems; Infrastructure; Media & Digital; Living Related & Real Estate; and Mineral Resources, Energy, Chemical & Electronics. The company provides steel sheets and tubular products; and manufactures, leases, sells, services, and finances ships, aircrafts, motor vehicles, construction equipment, and components and parts. It is involved in the development of renewable energy projects comprising power generation and power plant engineering, procurement, and construction activities; electricity retail; industrial facilities and equipment, water, transportation systems and infrastructure, airports, smart city project, environmental solutions, and storage battery businesses; development and operation of industrial parks; arranging insurance; and provision of logistics services. In addition, the company engages in the cable television, 5G related technologies, programming distribution, movies, digital media and video content, TV shopping, and e-commerce businesses; cell phone, ICT platform, digital solution, and venture capital businesses; provision of smart communications infrastructure; operation of food supermarkets and drugstore chains; trade of cement and building materials; and real estate businesses. Further, it develops and trades in coal, iron ore, manganese, uranium, non-ferrous and precious metals, petroleum, natural gas and liquefied natural gas, and commodity derivative transactions; trades in non-ferrous metal products, liquefied petroleum gas, storage batteries, carbon products, plastics, organic and inorganic chemicals, silicon wafers, LEDs, pharmaceuticals, agricultural chemicals, household insecticides, fertilizers, and veterinary drugs; engages in the investing activities; and provides electronics manufacturing services. Sumitomo Corporation was incorporated in 1919 and is headquartered in Tokyo, Japan.

About Scully Royalty

Scully Royalty Ltd. operates as an iron ore mining company in the Americas, Africa, Canada, Asia, and Europe. It operates through three segments: Royalty, Industrial, and Merchant Banking. The company holds royalty interest in the Scully iron ore mine located in the Province of Newfoundland and Labrador, Canada. It also engages in manufacturing, and medical supplies and services industries. In addition, the company offers merchant banking and financial services to small and medium sized enterprises; operates projects in resources and services; and holds two industrial real estate parks. Scully Royalty Ltd. was formerly known as MFC Bancorp Ltd. and changed its name to Scully Royalty Ltd. in June 2019. The company was incorporated in 2017 and is based in Shanghai, the People's Republic of China.