Financial Analysis: West Japan Railway (WJRYY) & Its Competitors

West Japan Railway (OTCMKTS:WJRYY) is one of 101 public companies in the “Ground Transportation” industry, but how does it contrast to its competitors? We will compare West Japan Railway to similar companies based on the strength of its profitability, dividends, earnings, institutional ownership, risk, analyst recommendations and valuation.

Volatility and Risk

West Japan Railway has a beta of 0.13, indicating that its stock price is 87% less volatile than the S&P 500. Comparatively, West Japan Railway’s competitors have a beta of 1.09, indicating that their average stock price is 9% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for West Japan Railway and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
West Japan Railway	0	1	0	0	2.00
West Japan Railway Competitors	1320	6329	8425	252	2.47

As a group, “Ground Transportation” companies have a potential upside of 12.07%. Given West Japan Railway’s competitors stronger consensus rating and higher probable upside, analysts clearly believe West Japan Railway has less favorable growth aspects than its competitors.

Profitability

This table compares West Japan Railway and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
West Japan Railway	6.41%	9.36%	3.21%
West Japan Railway Competitors	5.39%	9.38%	3.79%

Earnings and Valuation

This table compares West Japan Railway and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
West Japan Railway	$12.26 billion	$846.98 million	10.79
West Japan Railway Competitors	$8.88 billion	$920.60 million	51.75

West Japan Railway has higher revenue, but lower earnings than its competitors. West Japan Railway is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Dividends

West Japan Railway pays an annual dividend of $0.39 per share and has a dividend yield of 2.2%. West Japan Railway pays out 23.4% of its earnings in the form of a dividend. As a group, “Ground Transportation” companies pay a dividend yield of 1.4% and pay out 27.9% of their earnings in the form of a dividend. West Japan Railway is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

60.5% of shares of all “Ground Transportation” companies are held by institutional investors. 15.5% of shares of all “Ground Transportation” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

West Japan Railway competitors beat West Japan Railway on 11 of the 15 factors compared.

About West Japan Railway

West Japan Railway Company provides railway transport services in Japan. The company operates through Mobility, Retail, Real Estate, Travel and Regional Solutions, and Other segments. The Mobility segment provides passenger transportation, station operation and management, cleaning and maintenance, construction, machinery and equipment installation, rolling stock and other facility construction services, as well as engages in the railway operations and electric works. The Retail segment sells goods; offers food and other wholesale operation services; and operates department stores. The Real Estate segment sells and leases real estate properties, as well as operates shopping centers and hotels. The Travel and Regional Solutions segment provides travel agency and regional solutions. The Other segment engages in the advertising and other businesses. The company is also involved in the operation of convenience stores, restaurants, and souvenir shops; and provision of credit cards and electronic money services. The company was incorporated in 1987 and is based in Osaka, Japan.