Comparing PetMed Express (NASDAQ:PETS) and Monotaro (OTCMKTS:MONOY)

Monotaro (OTCMKTS:MONOY) and PetMed Express (NASDAQ:PETS) are both retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, profitability, valuation and analyst recommendations.

Institutional and Insider Ownership

0.1% of Monotaro shares are held by institutional investors. Comparatively, 73.3% of PetMed Express shares are held by institutional investors. 2.0% of PetMed Express shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Monotaro and PetMed Express, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Monotaro	0	2	0	0	2.00
PetMed Express	1	1	0	0	1.50

Profitability

This table compares Monotaro and PetMed Express’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Monotaro	9.66%	28.14%	18.81%
PetMed Express	-32.00%	-76.86%	-31.67%

Dividends

Monotaro pays an annual dividend of $0.13 per share and has a dividend yield of 1.2%. PetMed Express pays an annual dividend of $0.90 per share and has a dividend yield of 48.6%. Monotaro pays out 28.9% of its earnings in the form of a dividend. PetMed Express pays out -32.7% 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. PetMed Express is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Monotaro has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500. Comparatively, PetMed Express has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500.

Earnings & Valuation

This table compares Monotaro and PetMed Express”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Monotaro	$2.23 billion	2.53	$217.31 million	$0.45	25.05
PetMed Express	$179.02 million	0.22	-$57.29 million	($2.75)	-0.67

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

Summary

Monotaro beats PetMed Express on 10 of the 14 factors compared between the two stocks.

About Monotaro

MonotaRO Co., Ltd., together with its subsidiaries, operates an online MRO products store in Japan and internationally. The company offers safety protective equipment, work clothes, and safety shoes; logistics, storage, and packing supplies; tapes; safety, disaster prevention, and crime prevention products; safety signs; ship and fishing supplies; office supplies; office furniture/lighting/cleaning supplies; cutting tools and abrasives; measurement and surveying equipment; hand tools/electric and pneumatic tools; sprays, oils, greases, and paints; adhesives and repair materials; welding supplies; and piping and water related components/pumps/pneumatic and hydraulic equipment/hoses. It also provides mechanical parts; control equipment; soldering and anti-static products; architectural hardware, building materials, painting, and interior supplies; air conditioning and electrical equipment; electrical materials; screws, bolts, nails, and materials; automotive supplies; truck supplies; motorcycle supplies; bicycle supplies; scientific research and development supplies; clean room supplies; kitchen equipment and store supplies; agricultural and gardening supplies; and medical and nursing supplies. It serves factories, construction, automobile maintenance, and other industries. The company was formerly known as Sumisho Grainger Co., Ltd. and changed its name to MonotaRO Co., Ltd. in February 2006. The company was incorporated in 2000 and is headquartered in Osaka, Japan. MonotaRO Co., Ltd. operates as a subsidiary of Grainger Global Holdings, Inc.

About PetMed Express

PetMed Express, Inc., together with its subsidiaries, operates as a pet pharmacy in the United States. The company markets prescription and non-prescription pet medications, health products, and other supplies for dogs, cats, and horses. It offers non-prescription medications and supplies, such as flea and tick control products, bone and joint care products, vitamins, treats, nutritional supplements, hygiene products, and household pet supplies; and prescription medications, including heartworm preventatives, flea and tick preventatives, arthritis, dermatitis, thyroid, diabetes, pain medications, heart/blood pressure, and other specialty medications, as well as generic substitutes. The company also sells food, beds, crates, stairs, and other pet supplies. It sells its products through its Internet website; mobile app; customer support center; and direct mail/print, which includes brochures and postcards. The company was incorporated in 1996 and is headquartered in Delray Beach, Florida.