Critical Analysis: Metcash (MCSHF) & Its Peers

Metcash (OTCMKTS:MCSHF) is one of 150 publicly-traded companies in the “Consumer Staples Distribution & Retail” industry, but how does it contrast to its rivals? We will compare Metcash to similar businesses based on the strength of its analyst recommendations, dividends, risk, profitability, valuation, institutional ownership and earnings.

Insider and Institutional Ownership

29.0% of Metcash shares are owned by institutional investors. Comparatively, 45.0% of shares of all “Consumer Staples Distribution & Retail” companies are owned by institutional investors. 19.7% of shares of all “Consumer Staples Distribution & Retail” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Metcash and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Metcash	N/A	N/A	9.32
Metcash Competitors	$35.63 billion	$827.08 million	17.67

Metcash’s rivals have higher revenue and earnings than Metcash. Metcash is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Dividends

Metcash pays an annual dividend of $0.26 per share and has a dividend yield of 14.5%. Metcash pays out 135.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Consumer Staples Distribution & Retail” companies pay a dividend yield of 3.9% and pay out 37.3% of their earnings in the form of a dividend.

Profitability

This table compares Metcash and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Metcash	N/A	N/A	N/A
Metcash Competitors	-25.69%	1.41%	2.27%

Analyst Recommendations

This is a breakdown of current ratings for Metcash and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Metcash	0	1	0	0	2.00
Metcash Competitors	2220	8160	9904	448	2.41

As a group, “Consumer Staples Distribution & Retail” companies have a potential upside of 56.34%. Given Metcash’s rivals stronger consensus rating and higher probable upside, analysts plainly believe Metcash has less favorable growth aspects than its rivals.

Summary

Metcash rivals beat Metcash on 11 of the 13 factors compared.

Metcash Company Profile

Metcash Limited operates as a wholesale distribution and marketing company in Australia. It operates through Food, Liquor, and Hardware segments. The Food segment distributes a range of products and services to independent supermarket and convenience retail outlets. The Hardware segment distributes hardware products to independent retail outlets; and operates company owned retail stores. The Liquor segment engages in the distribution of liquor products to independent retail outlets and hotels. It sells its products under the IGA, Foodland, Mitre 10, Home Hardware, Total Tools, Cellarbrations, IGA Liquor, and the Bottle-O brand names. Metcash Limited was founded in 1927 and is based in Macquarie Park, Australia.