Financial Contrast: Nintendo (NTDOY) and The Competition

Nintendo (OTCMKTS: NTDOY) is one of 323 public companies in the “Private households” industry, but how does it compare to its peers? We will compare Nintendo to similar companies based on the strength of its institutional ownership, valuation, profitability, analyst recommendations, risk, dividends and earnings.

Volatility and Risk

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Nintendo has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, Nintendo’s peers have a beta of 0.92, meaning that their average stock price is 8% less volatile than the S&P 500.

Insider and Institutional Ownership

0.1% of Nintendo shares are held by institutional investors. Comparatively, 46.1% of shares of all “Private households” companies are held by institutional investors. 0.9% of shares of all “Private households” companies are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Nintendo and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nintendo 1 1 2 0 2.25
Nintendo Competitors 714 2104 1756 78 2.26

Nintendo currently has a consensus price target of $66.00, indicating a potential upside of 18.90%. As a group, “Private households” companies have a potential downside of 5.85%. Given Nintendo’s higher probable upside, analysts plainly believe Nintendo is more favorable than its peers.

Earnings and Valuation

This table compares Nintendo and its peers gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Nintendo $4.52 billion $902.65 million 150.03
Nintendo Competitors $13.04 billion $1.05 billion 18.59

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

Dividends

Nintendo pays an annual dividend of $0.09 per share and has a dividend yield of 0.2%. Nintendo pays out 24.3% of its earnings in the form of a dividend. As a group, “Private households” companies pay a dividend yield of 1.8% and pay out 34.5% of their earnings in the form of a dividend.

Profitability

This table compares Nintendo and its peers’ 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 9.97% 11.27% 4.90%

Summary

Nintendo peers beat Nintendo on 9 of the 15 factors compared.

About Nintendo

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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