Monotaro (OTCMKTS:MONOY) vs. Dollarama (OTCMKTS:DLMAF) Head to Head Analysis

Dollarama (OTCMKTS:DLMAF) and Monotaro (OTCMKTS:MONOY) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, analyst recommendations, profitability, institutional ownership and earnings.

Insider and Institutional Ownership

0.1% of Monotaro shares are held by institutional investors. 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Dollarama	17.32%	96.41%	17.21%
Monotaro	9.70%	29.68%	19.14%

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dollarama	$5.21 billion	7.49	$940.70 million	$3.60	40.45
Monotaro	$2.23 billion	3.32	$217.31 million	$0.46	32.50

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

Dividends

Dollarama pays an annual dividend of $0.34 per share and has a dividend yield of 0.2%. Monotaro pays an annual dividend of $0.14 per share and has a dividend yield of 0.9%. Dollarama pays out 9.4% of its earnings in the form of a dividend. Monotaro pays out 30.4% 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.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Dollarama and Monotaro, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dollarama	0	4	4	5	3.08
Monotaro	0	0	1	0	3.00

Summary

Dollarama beats Monotaro on 11 of the 14 factors compared between the two stocks.

About Dollarama

Dollarama Inc. operates a chain of dollar stores in Canada. Its stores offer general merchandise, consumables, and seasonal products. It also sells its products through online store. The company was formerly known as Dollarama Capital Corporation and changed its name to Dollarama Inc. in September 2009. Dollarama Inc. was founded in 1992 and is headquartered in Mount Royal, Canada.

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.