Head-To-Head Analysis: Itochu (OTCMKTS:ITOCY) vs. MercadoLibre (NASDAQ:MELI)

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

Profitability

This table compares Itochu and MercadoLibre’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
MercadoLibre	4.91%	25.15%	3.81%

Risk and Volatility

Itochu has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, MercadoLibre has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500.

Institutional & Insider Ownership

0.1% of Itochu shares are owned by institutional investors. Comparatively, 87.6% of MercadoLibre shares are owned by institutional investors. 0.3% of MercadoLibre shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Itochu and MercadoLibre, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Itochu	0	1	1	2	3.25
MercadoLibre	0	5	13	1	2.79

MercadoLibre has a consensus target price of $2,170.62, indicating a potential upside of 45.53%. Given MercadoLibre’s higher possible upside, analysts plainly believe MercadoLibre is more favorable than Itochu.

Earnings and Valuation

This table compares Itochu and MercadoLibre”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	1.22	$5.63 billion	$0.91	16.60
MercadoLibre	$28.89 billion	2.62	$2.00 billion	$37.28	40.01

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

Summary

MercadoLibre beats Itochu on 11 of the 15 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 MercadoLibre

MercadoLibre, Inc. operates an online commerce and financial technology platform focused on Latin America. Founded in Argentina in 1999, the company connects buyers and sellers through its marketplace, where businesses and individuals can list and purchase a wide range of products. The company’s services also include Mercado Pago, which offers digital payment and financial services for transactions on and off its marketplace. MercadoLibre supports commerce with services such as Mercado Envíos, its shipping and logistics platform, and provides advertising tools for merchants and brands.