Head-To-Head Review: Itochu (OTCMKTS:ITOCY) & DICK’S Sporting Goods (NYSE:DKS)

DICK’S Sporting Goods (NYSE:DKS) and Itochu (OTCMKTS:ITOCY) are both large-cap retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, valuation, profitability and analyst recommendations.

Dividends

DICK’S Sporting Goods pays an annual dividend of $4.85 per share and has a dividend yield of 2.2%. Itochu pays an annual dividend of $2.01 per share and has a dividend yield of 1.6%. DICK’S Sporting Goods pays out 33.9% of its earnings in the form of a dividend. Itochu pays out 21.6% 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. DICK’S Sporting Goods has raised its dividend for 11 consecutive years. DICK’S Sporting Goods is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares DICK’S Sporting Goods and Itochu’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DICK’S Sporting Goods	8.52%	36.54%	11.01%
Itochu	N/A	N/A	N/A

Earnings and Valuation

This table compares DICK’S Sporting Goods and Itochu”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DICK’S Sporting Goods	$13.77 billion	1.26	$1.17 billion	$14.32	15.12
Itochu	$96.69 billion	0.92	$5.89 billion	$9.31	13.26

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

Analyst Ratings

This is a breakdown of recent recommendations for DICK’S Sporting Goods and Itochu, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DICK’S Sporting Goods	2	10	12	0	2.42
Itochu	0	0	0	0	0.00

DICK’S Sporting Goods currently has a consensus target price of $234.29, suggesting a potential upside of 8.22%. Given DICK’S Sporting Goods’ stronger consensus rating and higher possible upside, equities analysts plainly believe DICK’S Sporting Goods is more favorable than Itochu.

Insider & Institutional Ownership

89.8% of DICK’S Sporting Goods shares are held by institutional investors. Comparatively, 0.1% of Itochu shares are held by institutional investors. 32.5% of DICK’S Sporting Goods shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

DICK’S Sporting Goods has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500. Comparatively, Itochu has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500.

Summary

DICK’S Sporting Goods beats Itochu on 14 of the 17 factors compared between the two stocks.

About DICK’S Sporting Goods

DICK’s Sporting Goods, Inc. engages in the retailing of an extensive assortment of authentic sports equipment, apparel, footwear, and accessories. It also offers its products both online and through mobile applications. The company was founded by Richard T. Stack in 1948 and is headquartered in Coraopolis, PA.

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.