Contrasting Nintendo (NTDOY) and The Competition

Nintendo (OTCMKTS: NTDOY) is one of 119 publicly-traded companies in the “OTHER CONS DISC” industry, but how does it weigh in compared to its competitors? We will compare Nintendo to related businesses based on the strength of its institutional ownership, valuation, earnings, risk, profitability, dividends and analyst recommendations.

Volatility and Risk

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Nintendo has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Nintendo’s competitors have a beta of -32.05, meaning that their average stock price is 3,305% less volatile than the S&P 500.

Profitability

This table compares Nintendo and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nintendo 16.12% 9.07% 7.56%
Nintendo Competitors -8.13% 5.51% 2.69%

Valuation & Earnings

This table compares Nintendo and its competitors gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Nintendo $4.52 billion $902.65 million 52.46
Nintendo Competitors $1.76 billion $93.16 million 25.13

Nintendo has higher revenue and earnings than its competitors. Nintendo is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Nintendo and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nintendo 1 2 2 0 2.20
Nintendo Competitors 423 2265 3460 146 2.53

Nintendo presently has a consensus price target of $66.00, suggesting a potential upside of 14.36%. As a group, “OTHER CONS DISC” companies have a potential upside of 11.64%. Given Nintendo’s higher possible upside, equities research analysts clearly believe Nintendo is more favorable than its competitors.

Institutional and Insider Ownership

0.2% of Nintendo shares are owned by institutional investors. Comparatively, 56.3% of shares of all “OTHER CONS DISC” companies are owned by institutional investors. 21.6% of shares of all “OTHER CONS DISC” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Nintendo pays an annual dividend of $0.57 per share and has a dividend yield of 1.0%. Nintendo pays out 51.8% of its earnings in the form of a dividend. As a group, “OTHER CONS DISC” companies pay a dividend yield of 1.5% and pay out 33.4% of their earnings in the form of a dividend. Nintendo lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Nintendo beats its competitors on 8 of the 15 factors compared.

Nintendo Company Profile

Nintendo Co., Ltd. is mainly engaged in the development, manufacture and sale of entertainment products in home entertainment field. The Company’s main products include leisure machines such as portable and console game machines and software, as well as trump and Carta (Japanese-style playing cards). As of March 31, 2014, the Company had 29 subsidiaries and six associated companies.

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