Critical Analysis: Raia Drogasil (RADLY) versus Its Competitors

Raia Drogasil (OTCMKTS:RADLY) is one of 150 public companies in the “Consumer Staples Distribution & Retail” industry, but how does it compare to its competitors? We will compare Raia Drogasil to similar businesses based on the strength of its institutional ownership, risk, earnings, profitability, analyst recommendations, dividends and valuation.

Profitability

This table compares Raia Drogasil and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Raia Drogasil	2.97%	18.20%	5.32%
Raia Drogasil Competitors	-25.66%	1.78%	2.61%

Insider and Institutional Ownership

45.0% of shares of all “Consumer Staples Distribution & Retail” companies are owned by institutional investors. 19.7% of shares of all “Consumer Staples Distribution & Retail” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Raia Drogasil pays an annual dividend of $0.04 per share and has a dividend yield of 1.0%. Raia Drogasil pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Consumer Staples Distribution & Retail” companies pay a dividend yield of 4.0% and pay out 36.7% of their earnings in the form of a dividend. Raia Drogasil lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Valuation & Earnings

This table compares Raia Drogasil and its competitors revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Raia Drogasil	$7.92 billion	$232.27 million	82.60
Raia Drogasil Competitors	$34.28 billion	$835.93 million	19.06

Raia Drogasil’s competitors have higher revenue and earnings than Raia Drogasil. Raia Drogasil is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Raia Drogasil and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Raia Drogasil	0	1	0	0	2.00
Raia Drogasil Competitors	2232	8222	9994	449	2.41

As a group, “Consumer Staples Distribution & Retail” companies have a potential upside of 57.21%. Given Raia Drogasil’s competitors stronger consensus rating and higher possible upside, analysts plainly believe Raia Drogasil has less favorable growth aspects than its competitors.

Summary

Raia Drogasil competitors beat Raia Drogasil on 10 of the 14 factors compared.

About Raia Drogasil

Raia Drogasil S.A. engages in the retail sale of medicines, perfumery, personal care and beauty products, cosmetics, dermocosmetics, and specialty medicines in Brazil. It also markets its goods through telesales and call centers in the states of São Paulo, Tocantins, and Pernambuco. The company was founded in 1905 and is headquartered in São Paulo, Brazil.