Comparing Five Below (NASDAQ:FIVE) and Itochu (OTCMKTS:ITOCY)

Five Below (NASDAQ:FIVE) and Itochu (OTCMKTS:ITOCY) are both large-cap retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, risk, profitability, dividends and earnings.

Earnings and Valuation

This table compares Five Below and Itochu”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Five Below	$3.88 billion	2.99	$253.61 million	$5.57	37.77
Itochu	$96.69 billion	1.05	$5.89 billion	$0.94	13.59

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Five Below	6.96%	17.15%	7.09%
Itochu	N/A	N/A	N/A

Analyst Recommendations

This is a summary of current ratings and recommmendations for Five Below and Itochu, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Five Below	0	8	13	1	2.68
Itochu	0	1	1	2	3.25

Five Below presently has a consensus price target of $205.75, indicating a potential downside of 2.19%. Given Five Below’s higher probable upside, research analysts plainly believe Five Below is more favorable than Itochu.

Insider & Institutional Ownership

0.1% of Itochu shares are owned by institutional investors. 1.9% of Five Below shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Five Below has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, Itochu has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500.

Summary

Five Below beats Itochu on 10 of the 15 factors compared between the two stocks.

About Five Below

Five Below, Inc. operates as a specialty value retailer in the United States. The company offers range of accessories, which includes novelty socks, sunglasses, jewelry, scarves, gloves, hair accessories, athletic tops and bottoms, and t-shirts, as well as nail polish, lip gloss, fragrance, and branded cosmetics; and personalized living space products, such as lamps, posters, frames, fleece blankets, plush items, pillows, candles, incense, lighting, novelty décor, accent furniture, and related items, as well as provides storage options. It provides assortment of sports balls, team sports merchandise, and fitness accessories comprising hand weights, jump ropes, and gym balls; various games, such as board games, puzzles, collectibles, and toys, including remote control; and summer season sports, which includes pool, beach, and outdoor toys, as well as games and accessories. In addition, the company offers accessories for cell phones, tablets, audio, and computers, as well as cases, chargers, headphones, and other related items; and media products including books, video games, and DVDs. It also provides assortment of craft activity kits, and arts and crafts supplies, such as crayons, markers, and stickers; and school products comprising backpacks, fashion notebooks and journals, novelty pens and pencils, and locker accessories. Further, the company offers party products, which includes party goods, decorations, gag gifts, and greeting cards, as well as every day and special occasion merchandise; assortment of classic and novelty candy bars, movie-size box candy, seasonal-related candy, and gum and snack food products, as well as sells chilled drinks through coolers; and provides seasonally specific items used to celebrate and decorate for events. The company was formerly known as Cheap Holdings, Inc. and changed its name to Five Below, Inc. in August 2002. Five Below, Inc. was incorporated in 2002 and is headquartered in Philadelphia, Pennsylvania.

About Itochu

ITOCHU Corporation engages in trading and importing/exporting various products worldwide. The company’s Textile segment produces and sells raw materials, threads, and textiles; and garments, home furnishings, and industrial materials, as well as trades in industrial textile and lifestyle products. Its Machinery segment engages in the plants, bridges, railways, and other infrastructure; power generation, transmission, transformation, and sale; water, environment and waste-related; ship trading; renewable and alternative energy; and waste recycling businesses. The company’s Metals & Minerals segment engages in development of metal and mineral resource; processing and steel products; trading of iron ore, coal, pig iron and ferrous raw materials, non-ferrous and light metals, steel products, nuclear fuels, and greenhouse gas emissions; and recycling and waste treatment activities. Its Energy & Chemicals segment trades in crude oil, petroleum products, LPG, LNG, natural gas, hydrogen, organic and inorganic chemicals, functional food, synthetic resins, packaging materials, household goods, fine chemicals, pharmaceuticals, and electronic materials, as well as engages in the solar and biomass power generation, electricity trading, and the energy storage cell businesses. The company’s Food segment produces, distributes, and retails food products. Its General Products & Realty segment produces and sells paper, pulp, natural rubber, tire, and wood products and materials; develops and operates real estate properties, such as housing, logistics facilities, and other projects; and offers logistics services. The company’s ICT & Financial Business segment offers IT, Internet related and venture capital, mobile telephone equipment, BPO, broadcasting and communications, entertainment and content, healthcare and preventive medicine outsourcing, and financial and insurance brokerage services. The company was founded in 1858 and is headquartered in Tokyo, Japan.