Analyzing Sony (NYSE:SONY) and Sekisui House (OTCMKTS:SKHSY)

Sekisui House (OTCMKTS:SKHSY) and Sony (NYSE:SONY) are both large-cap consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Valuation and Earnings

This table compares Sekisui House and Sony”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sekisui House	$28.07 billion	0.51	$1.56 billion	$2.52	8.78
Sony	$82.90 billion	1.90	-$2.16 billion	$1.12	23.85

Sekisui House has higher earnings, but lower revenue than Sony. Sekisui House is trading at a lower price-to-earnings ratio than Sony, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Sekisui House has a beta of 0.41, indicating that its stock price is 59% less volatile than the S&P 500. Comparatively, Sony has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500.

Insider & Institutional Ownership

0.0% of Sekisui House shares are owned by institutional investors. Comparatively, 14.1% of Sony shares are owned by institutional investors. 7.0% of Sony shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Sekisui House and Sony, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sekisui House	0	0	0	1	4.00
Sony	0	3	2	0	2.40

Sony has a consensus target price of $26.00, suggesting a potential downside of 2.66%. Given Sony’s higher possible upside, analysts clearly believe Sony is more favorable than Sekisui House.

Dividends

Sekisui House pays an annual dividend of $0.68 per share and has a dividend yield of 3.1%. Sony pays an annual dividend of $0.15 per share and has a dividend yield of 0.6%. Sekisui House pays out 27.0% of its earnings in the form of a dividend. Sony pays out 13.4% 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.

Profitability

This table compares Sekisui House and Sony’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sekisui House	6.15%	11.16%	4.87%
Sony	-1.54%	14.20%	7.69%

Summary

Sony beats Sekisui House on 11 of the 17 factors compared between the two stocks.

About Sekisui House

Sekisui House, Ltd. is a Japan-based homebuilder established in 1960 and headquartered in Osaka. The company designs and builds detached houses, rental apartments and condominiums, serving both individual customers and institutional clients. Its services also include home remodeling, real estate brokerage and management, and the development of commercial and urban properties. Sekisui House operates primarily in Japan and has expanded internationally, including in North America and Australia. The company’s businesses span the housing lifecycle, from planning and construction to property management and renovation.

About Sony

Sony Group Corporation is a Japan-based global entertainment and technology company, founded in Tokyo in 1946 by Masaru Ibuka and Akio Morita. Initially known as Tokyo Tsushin Kogyo, the company adopted the name Sony in 1958. Sony’s businesses include video games and network services through PlayStation; music recording and publishing; film and television production and distribution; consumer electronics, including televisions and cameras; and imaging and sensing technologies, including image sensors.