Lawson (OTCMKTS:LWSOF) vs. PriceSmart (NASDAQ:PSMT) Head to Head Review

Lawson (OTCMKTS:LWSOF) and PriceSmart (NASDAQ:PSMT) are both consumer defensive companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Insider & Institutional Ownership

20.1% of Lawson shares are held by institutional investors. Comparatively, 80.5% of PriceSmart shares are held by institutional investors. 18.6% of PriceSmart shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Lawson and PriceSmart, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lawson	0	2	0	0	2.00
PriceSmart	0	1	1	0	2.50

PriceSmart has a consensus price target of $82.00, suggesting a potential downside of 1.13%. Given PriceSmart’s stronger consensus rating and higher possible upside, analysts clearly believe PriceSmart is more favorable than Lawson.

Dividends

Lawson pays an annual dividend of $183.81 per share and has a dividend yield of 369.3%. PriceSmart pays an annual dividend of $1.16 per share and has a dividend yield of 1.4%. Lawson pays out 45.4% of its earnings in the form of a dividend. PriceSmart pays out 31.4% 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. PriceSmart has raised its dividend for 3 consecutive years.

Profitability

This table compares Lawson and PriceSmart’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lawson	N/A	N/A	N/A
PriceSmart	2.53%	11.92%	6.56%

Earnings & Valuation

This table compares Lawson and PriceSmart’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lawson	N/A	N/A	N/A	$404.83	0.12
PriceSmart	$4.41 billion	0.57	$109.21 million	$3.69	22.48

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

Summary

PriceSmart beats Lawson on 12 of the 14 factors compared between the two stocks.

About Lawson

Lawson, Inc. operates and franchises convenience stores under the Lawson, Lawson Store 100, and Natural Lawson names in Japan and internationally. It operates through Domestic Convenience Store Business, Seijo Ishii Business, Entertainment-Related Business, Financial-Related Business, and Overseas Business segments. The company is also involved in the wholesale of processed foods, frozen foods and other meat products, packaging materials, etc.; operation of a chain of supermarkets; and food production and restaurant businesses. In addition, it engages in the development of a general entertainment enterprises; operation of HMV stores, as well as integrated entertainment mall under the Lawson Hot Station L Paca name; construction and operation of movie theater complexes; and consulting and banking businesses. Further, the company is involved in the sale of CDs/DVDs, books/electronic books, and other goods; and entertainment merchandises, such as tickets for concerts, etc. through stores and online. Lawson, Inc. was formerly known as Daiei Convenience Systems, Co. Ltd. and changed its name to Lawson, Inc. in June 1996. The company was incorporated in 1975 and is headquartered in Tokyo, Japan. Lawson, Inc. operates as a subsidiary of Mitsubishi Corporation.

About PriceSmart

PriceSmart, Inc. owns and operates U.S.-style membership shopping warehouse clubs in the United States, Central America, the Caribbean, and Colombia. The company provides basic and private label consumer products under the Member's Selection brand, including groceries, cleaning supplies, health and beauty aids, meat, produce, deli, seafood, and poultry. It offers electronics, large and small appliances, automotive, hardware, sporting goods, seasonal products, clothing, domestics, and home furnishing products. In addition, the company offers food and bakery services, as well as health services, such as optical, audiology, and pharmacy. Further, it operates an e-commerce platform for online ordering, curbside pickup, and delivery services. PriceSmart, Inc. was incorporated in 1994 and is headquartered in San Diego, California.