Japan Tobacco (OTCMKTS:JAPAF) & Frontdoor (NASDAQ:FTDR) Financial Analysis

Frontdoor (NASDAQ:FTDR) and Japan Tobacco (OTCMKTS:JAPAF) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, earnings, risk, valuation, profitability and analyst recommendations.

Profitability

This table compares Frontdoor and Japan Tobacco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Frontdoor	12.72%	120.90%	14.86%
Japan Tobacco	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of current ratings for Frontdoor and Japan Tobacco, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Frontdoor	0	2	4	0	2.67
Japan Tobacco	0	0	1	0	3.00

Frontdoor currently has a consensus target price of $92.00, indicating a potential upside of 9.64%. Given Frontdoor’s higher possible upside, equities research analysts clearly believe Frontdoor is more favorable than Japan Tobacco.

Insider & Institutional Ownership

24.7% of Japan Tobacco shares are owned by institutional investors. 1.6% of Frontdoor shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Frontdoor and Japan Tobacco”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Frontdoor	$2.09 billion	2.82	$255.00 million	$3.77	22.26
Japan Tobacco	N/A	N/A	N/A	$225.55	0.21

Frontdoor has higher revenue and earnings than Japan Tobacco. Japan Tobacco is trading at a lower price-to-earnings ratio than Frontdoor, indicating that it is currently the more affordable of the two stocks.

Summary

Frontdoor beats Japan Tobacco on 8 of the 11 factors compared between the two stocks.

About Frontdoor

Frontdoor, Inc. provides home warranties in the United States in the United States. Its customizable home warranties help customers protect and maintain their homes from costly and unplanned breakdowns of essential home systems and appliances. The company’s home warranty customers subscribe to an annual service plan agreement that covers the repair or replacement of principal components of approximately 20 home systems and appliances, including electrical, plumbing, water heaters, refrigerators, dishwashers, and ranges/ovens/cooktops, as well as electronics, pools, and spas and pumps; and heating, ventilation, and air conditioning systems. It also offers on-demand home services and a one-stop app experience for home repair and maintenance; and Streem technology, an app that empowers homeowners by connecting them in real time through video chat with qualified experts to diagnose and solve their problems. The company serves homeowners under the Frontdoor, American Home Shield, HSA, OneGuard, Landmark Home Warranty, Frontdoor logo, and Streem brands. The company was founded in 1971 and is headquartered in Memphis, Tennessee.

About Japan Tobacco

Japan Tobacco Inc., a tobacco company, manufactures and sells tobacco products, pharmaceuticals, and processed foods in Japan and internationally. The company operates through three segments: Tobacco Business, Pharmaceutical Business, and Processed Food Business. It offers tobacco products, such as cigarettes, heat-not-burn tobacco products, E-vapor products, fine cut tobacco products, cigars, pipes, smokeless tobacco products, and hookah and kretek products. The company provides reduced-risk products, including infused tobacco capsules and heated tobacco sticks. In addition, it researches and develops, manufactures, and sells prescription drugs for the therapeutic areas, such as cardiovascular, kidney and metabolism, immunity/inflammation, and central nervous system. Further, the company provides frozen and room-temperature products, such as frozen udon noodles, packed rice, and frozen okonomiyaki; bakery products; and seasonings, including yeast extracts, assembled, kelp and bonito extracts, and oyster sauces. It offers its products under the Winston, Camel, MEVIUS, and LD brands. Japan Tobacco Inc. was incorporated in 1985 and is headquartered in Tokyo, Japan.