Itochu (OTCMKTS:ITOCY) vs. Dollarama (OTCMKTS:DLMAF) Critical Comparison

Itochu (OTCMKTS:ITOCY) and Dollarama (OTCMKTS:DLMAF) are both large-cap consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Analyst Ratings

This is a summary of current recommendations for Itochu and Dollarama, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Itochu	0	1	1	2	3.25
Dollarama	0	4	4	5	3.08

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Itochu	N/A	N/A	N/A
Dollarama	17.32%	96.41%	17.21%

Dividends

Itochu pays an annual dividend of $0.16 per share and has a dividend yield of 1.1%. Dollarama pays an annual dividend of $0.34 per share and has a dividend yield of 0.2%. Itochu pays out 17.6% of its earnings in the form of a dividend. Dollarama pays out 9.4% 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.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Itochu	$98.47 billion	1.21	$5.63 billion	$0.91	16.53
Dollarama	$5.21 billion	7.93	$940.70 million	$3.60	42.80

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

Institutional & Insider Ownership

0.1% of Itochu shares are owned 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.

Summary

Dollarama beats Itochu on 8 of the 13 factors compared between the two stocks.

About Itochu

ITOCHU Corporation is a Japanese general trading company that conducts businesses spanning trade, investment and business development. Its activities connect suppliers, manufacturers and customers across a broad range of industries and markets. The company’s businesses include textiles; machinery; metals and minerals; energy and chemicals; food; general products and real estate; and information and communications technology and financial services. Its operations include sourcing and distributing goods, supporting supply chains, and investing in and managing businesses.

About Dollarama

Dollarama Inc. is a Canadian discount retailer that sells a broad range of everyday products through its Dollarama stores. Its merchandise includes household and cleaning supplies, food and snacks, health and beauty products, stationery, toys, seasonal items and general merchandise. Founded in 1992 by Larry Rossy, the company began in Canada and has grown into a major discount-store chain serving communities across the country. Dollarama also has a majority interest in Dollarcity, a discount retailer with stores in Latin America.