Reviewing Monotaro (OTCMKTS:MONOY) and eBay (NASDAQ:EBAY)

eBay (NASDAQ:EBAY) and Monotaro (OTCMKTS:MONOY) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.

Profitability

This table compares eBay and Monotaro’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
eBay	18.50%	47.88%	12.38%
Monotaro	9.70%	28.73%	18.93%

Analyst Recommendations

This is a breakdown of current ratings and price targets for eBay and Monotaro, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
eBay	2	17	14	1	2.41
Monotaro	0	1	0	0	2.00

eBay presently has a consensus price target of $117.24, suggesting a potential upside of 8.81%. Given eBay’s stronger consensus rating and higher probable upside, research analysts clearly believe eBay is more favorable than Monotaro.

Earnings & Valuation

This table compares eBay and Monotaro”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
eBay	$12.01 billion	3.99	$2.03 billion	$4.83	22.31
Monotaro	$2.23 billion	2.75	$217.31 million	$0.46	26.91

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

Dividends

eBay pays an annual dividend of $1.24 per share and has a dividend yield of 1.2%. Monotaro pays an annual dividend of $0.06 per share and has a dividend yield of 0.5%. eBay pays out 25.7% of its earnings in the form of a dividend. Monotaro pays out 13.0% 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. eBay has raised its dividend for 7 consecutive years. eBay is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

eBay has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500. Comparatively, Monotaro has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500.

Insider & Institutional Ownership

87.5% of eBay shares are held by institutional investors. Comparatively, 0.1% of Monotaro shares are held by institutional investors. 0.7% of eBay shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

eBay beats Monotaro on 15 of the 18 factors compared between the two stocks.

About eBay

eBay Inc., together with its subsidiaries, operates marketplace platforms that connect buyers and sellers in the United States, the United Kingdom, China, Germany, and internationally. The company’s marketplace platform includes its online marketplace at ebay.com, off-platform businesses, and the eBay suite of mobile apps. Its platforms enable users to list, sell, and buy various products. The company was founded in 1995 and is headquartered in San Jose, California.

About Monotaro

MonotaRO Co., Ltd., together with its subsidiaries, operates an online MRO products store in Japan and internationally. The company offers safety protective equipment, work clothes, and safety shoes; logistics, storage, and packing supplies; tapes; safety, disaster prevention, and crime prevention products; safety signs; ship and fishing supplies; office supplies; office furniture/lighting/cleaning supplies; cutting tools and abrasives; measurement and surveying equipment; hand tools/electric and pneumatic tools; sprays, oils, greases, and paints; adhesives and repair materials; welding supplies; and piping and water related components/pumps/pneumatic and hydraulic equipment/hoses. It also provides mechanical parts; control equipment; soldering and anti-static products; architectural hardware, building materials, painting, and interior supplies; air conditioning and electrical equipment; electrical materials; screws, bolts, nails, and materials; automotive supplies; truck supplies; motorcycle supplies; bicycle supplies; scientific research and development supplies; clean room supplies; kitchen equipment and store supplies; agricultural and gardening supplies; and medical and nursing supplies. It serves factories, construction, automobile maintenance, and other industries. The company was formerly known as Sumisho Grainger Co., Ltd. and changed its name to MonotaRO Co., Ltd. in February 2006. The company was incorporated in 2000 and is headquartered in Osaka, Japan. MonotaRO Co., Ltd. operates as a subsidiary of Grainger Global Holdings, Inc.