Head-To-Head Analysis: PriceSmart (NASDAQ:PSMT) vs. Metcash (OTCMKTS:MCSHF)

Metcash (OTCMKTS:MCSHF) and PriceSmart (NASDAQ:PSMT) are both consumer staples companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, institutional ownership, earnings, profitability, risk and analyst recommendations.

Dividends

Metcash pays an annual dividend of $0.26 per share and has a dividend yield of 14.5%. PriceSmart pays an annual dividend of $1.40 per share and has a dividend yield of 0.8%. Metcash pays out 135.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PriceSmart pays out 26.9% of its earnings in the form of a dividend. PriceSmart has increased its dividend for 4 consecutive years.

Analyst Ratings

This is a breakdown of current ratings for Metcash and PriceSmart, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Metcash	0	1	0	0	2.00
PriceSmart	0	0	2	0	3.00

PriceSmart has a consensus price target of $198.00, suggesting a potential upside of 12.05%. Given PriceSmart’s stronger consensus rating and higher possible upside, analysts clearly believe PriceSmart is more favorable than Metcash.

Insider & Institutional Ownership

29.0% of Metcash shares are held by institutional investors. Comparatively, 80.5% of PriceSmart shares are held by institutional investors. 17.0% of PriceSmart shares are held 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.

Profitability

This table compares Metcash and PriceSmart’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Metcash	N/A	N/A	N/A
PriceSmart	2.82%	12.16%	6.67%

Valuation and Earnings

This table compares Metcash and PriceSmart”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Metcash	N/A	N/A	N/A	$0.19	9.32
PriceSmart	$5.27 billion	1.03	$147.89 million	$5.21	33.92

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

Summary

PriceSmart beats Metcash on 13 of the 14 factors compared between the two stocks.

About Metcash

Metcash Limited operates as a wholesale distribution and marketing company in Australia. It operates through Food, Liquor, and Hardware segments. The Food segment distributes a range of products and services to independent supermarket and convenience retail outlets. The Hardware segment distributes hardware products to independent retail outlets; and operates company owned retail stores. The Liquor segment engages in the distribution of liquor products to independent retail outlets and hotels. It sells its products under the IGA, Foodland, Mitre 10, Home Hardware, Total Tools, Cellarbrations, IGA Liquor, and the Bottle-O brand names. Metcash Limited was founded in 1927 and is based in Macquarie Park, Australia.

About PriceSmart

PriceSmart, Inc. owns and operates U.S.-style membership shopping warehouse clubs in the United States, Central America, the Caribbean, and Colombia. The company provides basic and private label consumer products under the Member's Selection brand, including groceries, cleaning supplies, health and beauty aids, meat, produce, deli, seafood, and poultry. It offers electronics, large and small appliances, automotive, hardware, sporting goods, seasonal products, clothing, domestics, and home furnishing products. In addition, the company offers food and bakery services, as well as health services, such as optical, audiology, and pharmacy. Further, it operates an e-commerce platform for online ordering, curbside pickup, and delivery services. PriceSmart, Inc. was incorporated in 1994 and is headquartered in San Diego, California.