Critical Contrast: Sumitomo (OTCMKTS:SSUMY) and Orkla Asa (OTCMKTS:ORKLY)

Sumitomo (OTCMKTS:SSUMY) and Orkla Asa (OTCMKTS:ORKLY) are both multi-sector conglomerates companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Sumitomo and Orkla Asa, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sumitomo	0	0	0	2	4.00
Orkla Asa	0	0	0	1	4.00

Valuation & Earnings

This table compares Sumitomo and Orkla Asa”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sumitomo	$47.89 billion	0.78	$3.75 billion	$3.39	9.12
Orkla Asa	$6.57 billion	1.52	$546.95 million	$0.99	10.09

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

Volatility and Risk

Sumitomo has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500. Comparatively, Orkla Asa has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500.

Profitability

This table compares Sumitomo and Orkla Asa’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sumitomo	8.34%	12.52%	5.24%
Orkla Asa	15.14%	13.07%	7.32%

Dividends

Sumitomo pays an annual dividend of $0.76 per share and has a dividend yield of 2.5%. Orkla Asa pays an annual dividend of $0.27 per share and has a dividend yield of 2.7%. Sumitomo pays out 22.4% of its earnings in the form of a dividend. Orkla Asa pays out 27.3% 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.

About Sumitomo

Sumitomo Corporation engages in general trading business worldwide. It operates through six segments: Metal Products; Transportation & Construction Systems; Infrastructure; Media & Digital; Living Related & Real Estate; and Mineral Resources, Energy, Chemical & Electronics. The company provides steel sheets and tubular products; and manufactures, leases, sells, services, and finances ships, aircrafts, motor vehicles, construction equipment, and components and parts. It is involved in the development of renewable energy projects comprising power generation and power plant engineering, procurement, and construction activities; electricity retail; industrial facilities and equipment, water, transportation systems and infrastructure, airports, smart city project, environmental solutions, and storage battery businesses; development and operation of industrial parks; arranging insurance; and provision of logistics services. In addition, the company engages in the cable television, 5G related technologies, programming distribution, movies, digital media and video content, TV shopping, and e-commerce businesses; cell phone, ICT platform, digital solution, and venture capital businesses; provision of smart communications infrastructure; operation of food supermarkets and drugstore chains; trade of cement and building materials; and real estate businesses. Further, it develops and trades in coal, iron ore, manganese, uranium, non-ferrous and precious metals, petroleum, natural gas and liquefied natural gas, and commodity derivative transactions; trades in non-ferrous metal products, liquefied petroleum gas, storage batteries, carbon products, plastics, organic and inorganic chemicals, silicon wafers, LEDs, pharmaceuticals, agricultural chemicals, household insecticides, fertilizers, and veterinary drugs; engages in the investing activities; and provides electronics manufacturing services. Sumitomo Corporation was incorporated in 1919 and is headquartered in Tokyo, Japan.

About Orkla Asa

Orkla ASA engages in branded consumer goods, and industrial and financial investment businesses. The company offers branded products, including frozen pizza, ketchup, soups, sauces, bread toppings, and ready-to-eat meals through grocery channels, as well as food service, convenience stores, and petrol stations. It also provides confectionery, biscuit, and snack products; and spices, masalas, and various food products based on dried mixes. In addition, the company offers personal care, hygiene, laundry detergent, and cleaning products; dietary supplement, oral care, sport nutrition, and weight control products; wound care products and first aid equipment; painting tools and accessories; basic and wool garments; and professional cleaning products. It operates Gymgrossisten, Proteinfabrikken, Bodystore, and Fitnesstukku e-commerce portals for health and sports nutrition products; and restaurants. Additionally, the company supplies margarine and butter blends, bread and cake improvers and mixes, yeast, marzipan, and ice cream ingredients; produces and supplies hydro power to the Nordic power market; and develops and sells real estate properties. It offers its food products under the Grandiosa, TORO, Stabburet, Felix, Paulúns, Fun Light, Abba, Beauvais, Kalles, Den Gamle Fabrik, Hamé, and Vitana brands; confectionery and snacks under the KiMs, Nidar, Stratos, Sætre, Göteborgs Kex, OLW, Panda, Laima, Selga, Taffel, Kalev, and Nói Síríus brands; home and personal care products under Zalo, OMO, Blenda, Jif, Define, Solidox, Dr Greve, Lano, and Bliw; health produtcs under Möller's, Jordan, Vitalab, OSL, Cederroth First Aid, Salvequick, Livol, Nutrilett, Maxim, Collett, Solidox and CuraMed brands; and food ingredients under the Odense, Mors Hjemmebakte, KronJäst, Bakkedal, and NATURLI brands. It has operations in Norway, Sweden, Denmark, Finland, Iceland, the Baltics, rest of Europe, and internationally. The company was founded in 1918 and is headquartered in Oslo, Norway.