Sumitomo (OTCMKTS:SSUMY – Get Free Report) and Star Equity (NASDAQ:STRR – Get Free Report) are both multi-sector conglomerates companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.
Profitability
This table compares Sumitomo and Star Equity’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sumitomo | 8.19% | 12.21% | 4.75% |
| Star Equity | -4.18% | -4.04% | -2.40% |
Risk and Volatility
Sumitomo has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500. Comparatively, Star Equity has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sumitomo | 0 | 1 | 0 | 0 | 2.00 |
| Star Equity | 2 | 1 | 1 | 1 | 2.20 |
Star Equity has a consensus price target of $28.00, indicating a potential upside of 141.59%. Given Star Equity’s stronger consensus rating and higher possible upside, analysts plainly believe Star Equity is more favorable than Sumitomo.
Institutional and Insider Ownership
3.8% of Star Equity shares are held by institutional investors. 10.4% of Star Equity shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Sumitomo and Star Equity”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sumitomo | $48.74 billion | 1.05 | $3.96 billion | $3.31 | 12.99 |
| Star Equity | $172.16 million | 0.25 | -$5.92 million | ($2.63) | -4.41 |
Sumitomo has higher revenue and earnings than Star Equity. Star Equity is trading at a lower price-to-earnings ratio than Sumitomo, indicating that it is currently the more affordable of the two stocks.
Summary
Sumitomo beats Star Equity on 9 of the 15 factors compared between the two stocks.
About Sumitomo
Sumitomo Corporation engages in general trading business worldwide. It operates through six segments: Metal Products; Transportation & Construction Systems; Infrastructure; Media & Digital; Living Related & Real Estate; and Mineral Resources, Energy, Chemical & Electronics. The company provides steel sheets and tubular products; and manufactures, leases, sells, services, and finances ships, aircrafts, motor vehicles, construction equipment, and components and parts. It is involved in the development of renewable energy projects comprising power generation and power plant engineering, procurement, and construction activities; electricity retail; industrial facilities and equipment, water, transportation systems and infrastructure, airports, smart city project, environmental solutions, and storage battery businesses; development and operation of industrial parks; arranging insurance; and provision of logistics services. In addition, the company engages in the cable television, 5G related technologies, programming distribution, movies, digital media and video content, TV shopping, and e-commerce businesses; cell phone, ICT platform, digital solution, and venture capital businesses; provision of smart communications infrastructure; operation of food supermarkets and drugstore chains; trade of cement and building materials; and real estate businesses. Further, it develops and trades in coal, iron ore, manganese, uranium, non-ferrous and precious metals, petroleum, natural gas and liquefied natural gas, and commodity derivative transactions; trades in non-ferrous metal products, liquefied petroleum gas, storage batteries, carbon products, plastics, organic and inorganic chemicals, silicon wafers, LEDs, pharmaceuticals, agricultural chemicals, household insecticides, fertilizers, and veterinary drugs; engages in the investing activities; and provides electronics manufacturing services. Sumitomo Corporation was incorporated in 1919 and is headquartered in Tokyo, Japan.
About Star Equity
Star Equity Holdings, Inc. engages in the construction business in the United States and internationally. It operates through two segments: Construction, and Investments. It manufactures modular housing units, structural wall panels, permanent wood foundation systems, and other engineered wood products; supplies general contractors with building materials; holds real estate assets; and manages investments. The company was formerly known as Digirad Corporation and changed its name to Star Equity Holdings, Inc. in December 2020. Star Equity Holdings, Inc. was founded in 1985 and is headquartered in Old Greenwich, Connecticut.
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