Ryder System (NYSE:R) versus West Japan Railway (OTCMKTS:WJRYY) Head to Head Review

West Japan Railway (OTCMKTS:WJRYY) and Ryder System (NYSE:R) are both mid-cap industrials companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, risk, valuation, profitability and institutional ownership.

Insider and Institutional Ownership

87.5% of Ryder System shares are held by institutional investors. 4.9% of Ryder System shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for West Japan Railway and Ryder System, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
West Japan Railway	0	1	0	0	2.00
Ryder System	0	5	6	1	2.67

Ryder System has a consensus price target of $294.14, indicating a potential upside of 25.03%. Given Ryder System’s stronger consensus rating and higher possible upside, analysts plainly believe Ryder System is more favorable than West Japan Railway.

Profitability

This table compares West Japan Railway and Ryder System’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
West Japan Railway	6.41%	9.37%	3.21%
Ryder System	3.88%	18.28%	3.33%

Earnings & Valuation

This table compares West Japan Railway and Ryder System”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
West Japan Railway	$12.26 billion	0.72	$841.49 million	$1.67	11.65
Ryder System	$12.85 billion	0.70	$499.00 million	$12.29	19.14

West Japan Railway has higher earnings, but lower revenue than Ryder System. West Japan Railway is trading at a lower price-to-earnings ratio than Ryder System, indicating that it is currently the more affordable of the two stocks.

Dividends

West Japan Railway pays an annual dividend of $0.39 per share and has a dividend yield of 2.0%. Ryder System pays an annual dividend of $4.04 per share and has a dividend yield of 1.7%. West Japan Railway pays out 23.4% of its earnings in the form of a dividend. Ryder System pays out 32.9% 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. Ryder System has raised its dividend for 20 consecutive years. West Japan Railway is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

West Japan Railway has a beta of 0.13, meaning that its share price is 87% less volatile than the S&P 500. Comparatively, Ryder System has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.

Summary

Ryder System beats West Japan Railway on 13 of the 18 factors compared between the two stocks.

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.

About Ryder System

Ryder System, Inc. operates as a logistics and transportation company worldwide. It operates through three segments: Fleet Management Solutions (FMS), Supply Chain Solutions (SCS), and Dedicated Transportation Solutions (DTS). The FMS segment offers full-service leasing and leasing with flexible maintenance options; commercial vehicle rental services; and contract or transactional maintenance services of trucks, tractors, and trailers; access to diesel fuel; and fuel planning and tax reporting, cards, and monitoring services, and centralized billing, as well as sells used vehicles through its retail sales centers and www.ryder.com/used-trucks website, as well as digital and technology support services. The DTS segment offers equipment, maintenance, drivers, administrative, and additional services, as well as routing and scheduling, fleet sizing, safety, regulatory compliance, risk management, and technology and communication systems support services. The SCS segment comprises distribution management services, such as designing and managing customer's distribution network and facilities; coordinating warehousing and transportation for inbound and outbound material flows; handling import and export for international shipments; coordinating just-in-time replenishment of component parts to manufacturing and final assembly; and offering shipments to customer distribution centers or end customer delivery points, as well as other value added services, such as light assembly of components. This segment also offers transportation management and brokerage services, such as shipment optimization, load scheduling, and delivery confirmation services; knowledge-based professional services; and e-commerce and last mile services. The company was founded in 1933 and is headquartered in Coral Gables, Florida.