Analyzing Macy’s (NYSE:M) and Marui Group (OTCMKTS:MAURY)

Macy’s (NYSE:M) and Marui Group (OTCMKTS:MAURY) are both mid-cap retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.

Volatility and Risk

Macy’s has a beta of 1.71, meaning that its share price is 71% more volatile than the S&P 500. Comparatively, Marui Group has a beta of 0.14, meaning that its share price is 86% less volatile than the S&P 500.

Dividends

Macy’s pays an annual dividend of $0.73 per share and has a dividend yield of 5.9%. Marui Group pays an annual dividend of $1.20 per share and has a dividend yield of 2.9%. Macy’s pays out 37.1% of its earnings in the form of a dividend. Marui Group pays out 63.8% 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. Macy’s has increased its dividend for 4 consecutive years. Macy’s is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Macy’s and Marui Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Macy’s	2	10	0	1	2.00
Marui Group	0	0	0	0	0.00

Macy’s presently has a consensus price target of $13.20, suggesting a potential upside of 5.98%. Given Macy’s’ stronger consensus rating and higher probable upside, analysts plainly believe Macy’s is more favorable than Marui Group.

Earnings & Valuation

This table compares Macy’s and Marui Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Macy’s	$23.01 billion	0.15	$582.00 million	$1.97	6.32
Marui Group	$1.67 billion	2.23	$175.49 million	$1.88	21.89

Macy’s has higher revenue and earnings than Marui Group. Macy’s is trading at a lower price-to-earnings ratio than Marui Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Macy’s and Marui Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Macy’s	2.45%	16.34%	4.35%
Marui Group	10.44%	10.89%	2.47%

Institutional and Insider Ownership

87.4% of Macy’s shares are held by institutional investors. 2.8% of Macy’s shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Macy’s beats Marui Group on 14 of the 17 factors compared between the two stocks.

About Macy’s

Macy’s, Inc. engages in the retail of apparel, accessories, cosmetics, home furnishings, and other consumer goods. The firm’s brands include Macy’s, Bloomingdale’s, and Bluemercury. It offers men’s, women’s, and children’s apparel, women’s accessories, intimate apparel, shoes, cosmetics, fragrances, as well as home and miscellaneous products. The company was founded by Rowland H. Macy in 1858 and is headquartered in New York, NY.

About Marui Group

Marui Group Co., Ltd., an investment holding company, engages in the retailing and FinTech businesses in Japan. The company engages in the design and construction of commercial facilities; advertising planning and production; property management; rental of real estate properties; small-amount short-term insurance policy business; and sale of investment trusts. It is also involved in the operation of websites; contract store opening and operation services; provision of credit card services; operation of Marui/Modi stores; investing and financing direct-to-consumer businesses; internet sales; specialty store; credit loan; collection and management of receivables; credit check; trucking and forwarding; software development; and operation of IT systems, and building management businesses. The company was founded in 1931 and is headquartered in Tokyo, Japan.