Head-To-Head Analysis: Sumitomo (OTCMKTS:SSUMY) and Hitachi (OTCMKTS:HTHIY)

Hitachi (OTCMKTS:HTHIY) and Sumitomo (OTCMKTS:SSUMY) are both large-cap multi-sector conglomerates companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Earnings & Valuation

This table compares Hitachi and Sumitomo”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hitachi	$70.33 billion	1.95	$5.33 billion	$1.18	25.58
Sumitomo	$48.74 billion	0.96	$3.96 billion	$3.31	11.88

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

Dividends

Hitachi pays an annual dividend of $0.23 per share and has a dividend yield of 0.8%. Sumitomo pays an annual dividend of $0.75 per share and has a dividend yield of 1.9%. Hitachi pays out 19.5% of its earnings in the form of a dividend. Sumitomo pays out 22.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Insider and Institutional Ownership

0.3% of Hitachi shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Hitachi has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, Sumitomo has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Hitachi and Sumitomo, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hitachi	1	1	0	1	2.33
Sumitomo	0	1	0	0	2.00

Profitability

This table compares Hitachi and Sumitomo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hitachi	7.64%	12.68%	5.68%
Sumitomo	8.19%	12.21%	4.75%

Summary

Hitachi beats Sumitomo on 11 of the 14 factors compared between the two stocks.

About Hitachi

Hitachi, Ltd. provides digital system and services, green energy and mobility, and connective industry solutions in Japan and internationally. It operates through seven segments: Digital Systems & Services, Green Energy & Mobility, Connective Industries, Automotive System, Hitachi Construction Machinery, Hitachi Metals, and Others. The company offers system integration, consulting, cloud services, storage, servers, and ATMs; finance solutions, social infrastructure information systems, government and public corporation information system, big data and AI, and IoT and data management; and IT products. It also operates power grids, nuclear and clear energy, renewable energy; provides energy management services and distributed power source solutions; semiconductors; elevators and escalators; air conditioners; industrial equipment; and railway systems. In addition, the company offers medical equipment for radiation therapy, In-vitro diagnosis, and regenerative medicines; automotive systems; home appliances; and water treatment solutions for water supply and sewage infrastructure, industrial water treatment, seawater desalination, and water recycling, as well as maintenance and repair services. Further, it hydraulic excavators, wheel loaders, mining machinery, construction solutions, and mine management systems. Additionally, the company offers specialty steel, functional components and equipment, power electronic and magnetic materials, wires, and cable and related products; optical disk drives; and property management services. Hitachi, Ltd. was founded in 1910 and is headquartered in Tokyo, Japan.

About Sumitomo

Sumitomo Corporation engages in general trading business worldwide. It operates through six segments: Metal Products; Transportation & Construction Systems; Infrastructure; Media & Digital; Living Related & Real Estate; and Mineral Resources, Energy, Chemical & Electronics. The company provides steel sheets and tubular products; and manufactures, leases, sells, services, and finances ships, aircrafts, motor vehicles, construction equipment, and components and parts. It is involved in the development of renewable energy projects comprising power generation and power plant engineering, procurement, and construction activities; electricity retail; industrial facilities and equipment, water, transportation systems and infrastructure, airports, smart city project, environmental solutions, and storage battery businesses; development and operation of industrial parks; arranging insurance; and provision of logistics services. In addition, the company engages in the cable television, 5G related technologies, programming distribution, movies, digital media and video content, TV shopping, and e-commerce businesses; cell phone, ICT platform, digital solution, and venture capital businesses; provision of smart communications infrastructure; operation of food supermarkets and drugstore chains; trade of cement and building materials; and real estate businesses. Further, it develops and trades in coal, iron ore, manganese, uranium, non-ferrous and precious metals, petroleum, natural gas and liquefied natural gas, and commodity derivative transactions; trades in non-ferrous metal products, liquefied petroleum gas, storage batteries, carbon products, plastics, organic and inorganic chemicals, silicon wafers, LEDs, pharmaceuticals, agricultural chemicals, household insecticides, fertilizers, and veterinary drugs; engages in the investing activities; and provides electronics manufacturing services. Sumitomo Corporation was incorporated in 1919 and is headquartered in Tokyo, Japan.