Analyzing MINISO Group (NYSE:MNSO) & Monotaro (OTCMKTS:MONOY)

Monotaro (OTCMKTS:MONOY) and MINISO Group (NYSE:MNSO) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Institutional and Insider Ownership

0.1% of Monotaro shares are owned by institutional investors. Comparatively, 17.2% of MINISO Group shares are owned by institutional investors. 73.5% of MINISO Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Monotaro	9.70%	29.68%	19.14%
MINISO Group	5.32%	19.41%	7.11%

Dividends

Monotaro pays an annual dividend of $0.14 per share and has a dividend yield of 1.1%. MINISO Group pays an annual dividend of $0.73 per share and has a dividend yield of 8.0%. Monotaro pays out 30.4% of its earnings in the form of a dividend. MINISO Group pays out 125.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares Monotaro and MINISO Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Monotaro	$2.23 billion	2.80	$217.31 million	$0.46	27.39
MINISO Group	$3.07 billion	0.90	$167.62 million	$0.58	15.66

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

Volatility & Risk

Monotaro has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, MINISO Group has a beta of 0.1, suggesting that its share price is 90% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Monotaro and MINISO Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Monotaro	0	1	0	0	2.00
MINISO Group	1	4	2	1	2.38

MINISO Group has a consensus price target of $15.27, suggesting a potential upside of 68.13%. Given MINISO Group’s stronger consensus rating and higher probable upside, analysts plainly believe MINISO Group is more favorable than Monotaro.

Summary

MINISO Group beats Monotaro on 9 of the 17 factors compared between the two stocks.

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.

About MINISO Group

MINISO Group Holding Limited, an investment holding company, engages in the retail and wholesale of lifestyle products and pop toy products in China, Asia, the United States, and Europe. The company offers products in various categories, including home decor products, small electronics, textiles, accessories, beauty tools, toys, cosmetics, personal care products, snacks, fragrances and perfumes, and stationeries and gifts under the MINISO and WonderLife brand names; and blind boxes, toy bricks, model figures, model kits, collectible dolls, Ichiban Kuji, sculptures, and other popular toys under the TOP TOY brand. The company was founded in 2013 and is based in Guangzhou, China.