Travelzoo (NASDAQ:TZOO) vs. Monotaro (OTCMKTS:MONOY) Critical Contrast

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Monotaro and Travelzoo, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Monotaro	0	2	0	0	2.00
Travelzoo	1	1	3	0	2.40

Travelzoo has a consensus price target of $18.00, suggesting a potential upside of 215.79%. Given Travelzoo’s stronger consensus rating and higher possible upside, analysts plainly believe Travelzoo is more favorable than Monotaro.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Monotaro	9.72%	28.03%	19.08%
Travelzoo	4.98%	-132.89%	9.75%

Risk & Volatility

Monotaro has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, Travelzoo has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Valuation and Earnings

This table compares Monotaro and Travelzoo”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Monotaro	$2.23 billion	2.44	$217.31 million	$0.44	24.68
Travelzoo	$91.72 million	0.68	$4.70 million	$0.38	15.00

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

Institutional & Insider Ownership

0.1% of Monotaro shares are held by institutional investors. Comparatively, 27.4% of Travelzoo shares are held by institutional investors. 45.3% of Travelzoo shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Monotaro beats Travelzoo on 9 of the 14 factors compared between the two stocks.

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.

About Travelzoo

Travelzoo, together with its subsidiaries, operates as an Internet media company that provides travel, entertainment, and local experiences worldwide. It operates in four segments: Travelzoo North America, Travelzoo Europe, Jack's Flight Club, and New Initiatives. The company offers Travelzoo website, Travelzoo Top 20 email newsletters, Standalone email newsletters, Travelzoo Network, Travelzoo mobile applications, Jack's Flight Club website, Jack's Flight Club mobile applications, and Jack's Flight Club newsletters. The company's Travelzoo website and newsletters include local deals and getaways listings that allow members to purchase vouchers for offers from local businesses, such as spas, hotels, and restaurants; Jack's Flight Club, a subscription service that provides members with information about exceptional airfares; and Travelzoo Network, a network of third-party websites that list travel deals published by the company. It serves airlines, hotels, cruise lines, vacations packagers, tour operators, destinations, car rental companies, travel agents, theater and performing arts groups, restaurants, spas, and activity companies. Travelzoo Inc. was incorporated in 1998 and is headquartered in New York, New York.