Financial Contrast: Itochu (OTCMKTS:ITOCY) vs. Amazon.com (NASDAQ:AMZN)

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

Volatility and Risk

Itochu has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, Amazon.com has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500.

Profitability

This table compares Itochu and Amazon.com’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
Amazon.com	16.90%	15.72%	7.79%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Itochu and Amazon.com, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Itochu	0	1	1	2	3.25
Amazon.com	0	3	55	2	2.98

Amazon.com has a consensus price target of $321.74, suggesting a potential upside of 20.30%. Given Amazon.com’s higher probable upside, analysts plainly believe Amazon.com is more favorable than Itochu.

Earnings and Valuation

This table compares Itochu and Amazon.com”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Itochu	$98.47 billion	1.21	$5.63 billion	$0.91	16.53
Amazon.com	$716.92 billion	4.03	$77.67 billion	$12.37	21.62

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

Institutional and Insider Ownership

0.1% of Itochu shares are owned by institutional investors. Comparatively, 72.2% of Amazon.com shares are owned by institutional investors. 8.9% of Amazon.com shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Amazon.com beats Itochu on 12 of the 13 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 Amazon.com

Amazon.com, Inc. is a technology and e-commerce company founded by Jeff Bezos in 1994 as an online bookstore. It has since grown into a global business serving consumers, sellers, developers, enterprises and content creators. Amazon operates online stores and marketplaces, where it sells products directly and enables third-party sellers to reach customers. Its other businesses include Amazon Web Services, which provides cloud computing and related services; digital advertising; Prime memberships; and entertainment offerings such as streaming video and music.