Japan Tob (OTCMKTS:JAPAY) & Gaotu Techedu (NYSE:GOTU) Head-To-Head Contrast

Japan Tob (OTCMKTS:JAPAY) and Gaotu Techedu (NYSE:GOTU) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, risk, earnings, profitability, analyst recommendations, dividends and valuation.

Profitability

This table compares Japan Tob and Gaotu Techedu’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Japan Tob	N/A	N/A	N/A
Gaotu Techedu	-6.42%	-29.69%	-7.18%

Risk and Volatility

Japan Tob has a beta of 0.27, indicating that its share price is 73% less volatile than the S&P 500. Comparatively, Gaotu Techedu has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Insider and Institutional Ownership

48.4% of Gaotu Techedu shares are held by institutional investors. 44.9% of Gaotu Techedu shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for Japan Tob and Gaotu Techedu, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Japan Tob	1	1	1	0	2.00
Gaotu Techedu	1	0	0	0	1.00

Japan Tob presently has a consensus target price of $17.00, suggesting a potential downside of 23.22%. Given Japan Tob’s stronger consensus rating and higher probable upside, analysts plainly believe Japan Tob is more favorable than Gaotu Techedu.

Earnings & Valuation

This table compares Japan Tob and Gaotu Techedu”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Japan Tob	$23.20 billion	3.39	$3.42 billion	$1.37	16.16
Gaotu Techedu	$878.98 million	0.46	-$46.23 million	($0.24)	-7.02

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

Summary

Japan Tob beats Gaotu Techedu on 11 of the 14 factors compared between the two stocks.

About Japan Tob

Japan Tobacco Inc., a tobacco company, manufactures and sells tobacco products, pharmaceuticals, and processed foods in Japan and internationally. The company operates through three segments: Tobacco Business, Pharmaceutical, and Processed Food. It offers tobacco products, such as cigarettes, heat-not-burn tobacco products, E-vapor products, fine cut tobacco products, cigars, pipes, smokeless tobacco products, and hookah and kretek products. The company also provides reduced-risk products, including infused tobacco capsules and heated tobacco sticks. In addition, it researches and develops, manufactures, and sells prescription drugs for the therapeutic areas, such as cardiovascular, kidney and metabolism, immunity/inflammation, and central nervous system. Further, the company provides frozen and room-temperature products, such as frozen udon noodles, packed rice, and frozen okonomiyaki; bakery products; and seasonings, including yeast extracts, assembled, kelp and bonito extracts, and oyster sauces. It offers its products under the Winston, Camel, MEVIUS, and LD brands. Japan Tobacco Inc. was incorporated in 1985 and is headquartered in Tokyo, Japan.

About Gaotu Techedu

Gaotu Techedu Inc., a technology-driven education company, provides learning services, educational content, and digitalized learning products in the People's Republic of China. The company offers traditional online academic subject tutoring services that covers academic subjects, such as mathematics, English, Chinese, physics, chemistry, biology, history, geography, and political science for students; non-academic tutoring services; personal interest courses comprising chess learning, family relationships and education, humanities, and science courses; and professional courses primarily for college students and adults preparing for professional qualification exams, such as teacher's qualification, Chartered Financial Analyst designation, Certified Public Accountant designation, and other exams. It also offers admission courses for admission tests and interviews, including national-post graduate entrance examination, civil service examinations, and others; foreign language courses; overseas study related services; and courses to prepare and pass certain language exams for study abroad, such as IELTS and TOEFL. In addition, the company designs and develops course outlines, interactive courseware, practice exercises, and lesson notes; publishes reference books comprising Chinese dictionary, dictionary of idioms, and past exam questions for the college entrance examination; and develops, expands, and upgrades education-centric digital products and solutions, as well as learning apps. Further, it offers books and digitalized auxiliary learning tools, such as smart devices and translation pens; and online tutoring services. The company was formerly known as GSX Techedu Inc. and changed its name to Gaotu Techedu Inc. in June 2021. Gaotu Techedu Inc. was incorporated in 2014 and is headquartered in Beijing, China.