Critical Survey: Nintendo (NTDOY) vs. Its Rivals

Nintendo (OTCMKTS: NTDOY) is one of 120 public companies in the “OTHER CONS DISC” industry, but how does it weigh in compared to its rivals? We will compare Nintendo to similar companies based on the strength of its earnings, dividends, analyst recommendations, profitability, institutional ownership, risk and valuation.

Dividends

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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 1.6% and pay out 33.5% of their earnings in the form of a dividend. Nintendo lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Volatility & Risk

Nintendo has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, Nintendo’s rivals have a beta of -31.74, meaning that their average share price is 3,274% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Nintendo and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nintendo 1 2 2 0 2.20
Nintendo Competitors 436 2337 3496 148 2.52

Nintendo currently has a consensus target price of $66.00, suggesting a potential upside of 17.33%. As a group, “OTHER CONS DISC” companies have a potential upside of 16.09%. Given Nintendo’s higher possible upside, research analysts plainly believe Nintendo is more favorable than its rivals.

Valuation and Earnings

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

Gross Revenue Net Income Price/Earnings Ratio
Nintendo $4.52 billion $902.65 million 51.14
Nintendo Competitors $1.75 billion $91.09 million 24.49

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

Profitability

This table compares Nintendo and its rivals’ 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 -7.86% 5.55% 2.72%

Institutional and Insider Ownership

0.1% of Nintendo shares are held by institutional investors. Comparatively, 56.2% of shares of all “OTHER CONS DISC” companies are held by institutional investors. 21.4% of shares of all “OTHER CONS DISC” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Nintendo beats its rivals 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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