Wal-Mart de México (OTCMKTS:WMMVY) vs. Lawson (OTCMKTS:LWSOF) Critical Comparison

Lawson (OTCMKTS:LWSOF) and Wal-Mart de México (OTCMKTS:WMMVY) are both consumer defensive companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.

Analyst Recommendations

This is a breakdown of current ratings for Lawson and Wal-Mart de México, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lawson	0	0	0	0	N/A
Wal-Mart de México	0	0	1	0	3.00

Valuation & Earnings

This table compares Lawson and Wal-Mart de México”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lawson	N/A	N/A	N/A	$404.83	0.16
Wal-Mart de México	$49.69 billion	0.97	$2.91 billion	$1.75	15.82

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

Profitability

This table compares Lawson and Wal-Mart de México’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
Wal-Mart de México	5.73%	25.59%	12.05%

Institutional and Insider Ownership

20.1% of Lawson shares are owned by institutional investors. 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

Lawson pays an annual dividend of $183.81 per share and has a dividend yield of 289.4%. Wal-Mart de México pays an annual dividend of $0.98 per share and has a dividend yield of 3.5%. Lawson pays out 45.4% of its earnings in the form of a dividend. Wal-Mart de México pays out 56.0% 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. Lawson is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Wal-Mart de México beats Lawson on 6 of the 10 factors compared between the two stocks.

About Lawson

Lawson, Inc. operates and franchises convenience stores under the Lawson, Lawson Store 100, and Natural Lawson brand names in Japan and internationally. The company operates through Domestic Convenience Store Business, Seijo Ishii Business, Entertainment-Related Business, Financial-Related Business, Overseas Business, and Others segments. It is also involved in the wholesale of processed and frozen food, and other meat products; packaging materials, etc.; operation of a chain of supermarkets; and food production and restaurant businesses. In addition, the company 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, It 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. The company 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 Wal-Mart de México

Wal-Mart de México, S.A.B. de C.V. owns and operates self-service stores in Mexico and Central America. The company operates discount warehouses and stores, hypermarkets, supermarkets, and membership self-service wholesale stores. It operates Bodega Aurrerá discount stores, Walmart hypermarkets, Walmart Express supermarkets, and Sam’s Club membership self-service wholesale stores. The company operates Despensa Familiar and Palí discount stores; Paiz, La Despensa de Don Juan, La Unión, and Más x Menos supermarkets; Bodegas, Maxi Bodega, and Maxi Palí stores; and Walmart hypermarkets in Costa Rica, Guatemala, Honduras, Nicaragua, and El Salvador. In addition, it imports and sells goods; develops properties; and manages real estate companies. The company was founded in 1958 and is headquartered in Mexico City, Mexico. Wal-Mart de México, S.A.B. de C.V. operates as a subsidiary of Intersalt, S. De R.l. De C.v.