Financial Analysis: Monotaro (OTCMKTS:MONOY) and Hour Loop (NASDAQ:HOUR)

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

Analyst Ratings

This is a summary of current ratings and price targets for Monotaro and Hour Loop, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Monotaro	0	1	0	0	2.00
Hour Loop	1	0	0	0	1.00

Valuation and Earnings

This table compares Monotaro and Hour Loop”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Monotaro	$1.91 billion	3.72	$173.82 million	$0.50	28.28
Hour Loop	$140.79 million	0.53	$660,000.00	$0.03	70.67

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Monotaro	9.57%	33.81%	23.76%
Hour Loop	0.59%	12.96%	3.57%

Insider and Institutional Ownership

0.1% of Monotaro shares are held by institutional investors. Comparatively, 0.3% of Hour Loop shares are held by institutional investors. 95.0% of Hour Loop shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Monotaro has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500. Comparatively, Hour Loop has a beta of 1.44, indicating that its share price is 44% more volatile than the S&P 500.

Summary

Monotaro beats Hour Loop on 8 of the 12 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 Hour Loop

Hour Loop, Inc., an online retailer, engages in e-commerce retailing in the United States. The company sells products in various categories, including home/garden décor, toys, kitchenware, apparels, and electronics products. It sells its products through hourloop.com, as well as third-party marketplaces. Hour Loop, Inc. was founded in 2013 and is headquartered in Redmond, Washington.