Head to Head Review: Michelin (OTCMKTS:MGDDY) & Matthews International (NASDAQ:MATW)

Matthews International (NASDAQ:MATW) and Michelin (OTCMKTS:MGDDY) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings for Matthews International and Michelin, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Matthews International	2	1	0	0	1.33
Michelin	0	6	2	0	2.25

Matthews International presently has a consensus target price of $24.00, indicating a potential upside of 14.67%. Given Matthews International’s higher possible upside, research analysts plainly believe Matthews International is more favorable than Michelin.

Risk & Volatility

Matthews International has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, Michelin has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.

Insider and Institutional Ownership

83.1% of Matthews International shares are held by institutional investors. Comparatively, 3.3% of Michelin shares are held by institutional investors. 4.7% of Matthews International shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Matthews International pays an annual dividend of $1.02 per share and has a dividend yield of 4.9%. Michelin pays an annual dividend of $0.53 per share and has a dividend yield of 2.6%. Matthews International pays out -109.7% of its earnings in the form of a dividend. Matthews International has raised its dividend for 30 consecutive years. Matthews International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Matthews International and Michelin’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Matthews International	-2.65%	4.51%	1.45%
Michelin	N/A	N/A	N/A

Valuation and Earnings

This table compares Matthews International and Michelin”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Matthews International	$1.50 billion	0.44	-$24.47 million	($0.93)	-22.51
Michelin	$29.40 billion	0.94	$1.88 billion	N/A	N/A

Michelin has higher revenue and earnings than Matthews International.

Summary

Matthews International beats Michelin on 9 of the 15 factors compared between the two stocks.

About Matthews International

Matthews International Corporation provides brand solutions, memorialization products, and industrial technologies worldwide. It operates through three segments: Memorialization, Industrial Technologies, and SGK Brand Solutions. The Memorialization segment provides bronze and granite memorials, upright granite memorials and monuments, concrete burial vaults, cremation memorialization products, granite benches, flower vases, crypt plates and letters, cremation urns, niche units, cemetery features, and statues, as well as bronze plaques, letters, emblems, vases, lights and photo ceramics, granite monuments, mausoleums, crypts, and flush memorials. The Industrial Technologies segment designs, manufactures, services, and distributes high-tech custom energy storage solutions, and product identification and warehouse automation technologies and solutions, including order fulfillment systems for identifying, tracking, picking, and conveying consumer and industrial products. This segment also provides engineered calendaring, laminating, and coating equipment; stand-alone marking products; laser and ink-jet printing systems; and spare parts, calendar, and coating-roller refurbishing and retrofits. The SGK Brand solutions segment provides brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services for the consumer goods and retail industries. The company was founded in 1850 and is based in Pittsburgh, Pennsylvania.

About Michelin

Compagnie Générale des Établissements Michelin SCA engages in the manufacture, distribution and sale of tires. Its products and services include tires, mobility services, lifestyle products, Michelin solutions and Michelin engineering and services. The company operates through the following segments: Passenger car and Light truck tires and related distribution, Truck tires and related distribution, and Specialty businesses. The company was founded by Aristide Barbier and Édouard Daubrée on July 15, 1863 and is headquartered in Clermont-Ferrand, France.