Analyzing Kobe Steel (OTCMKTS:KBSTF) and Matthews International (NASDAQ:MATW)

Matthews International (NASDAQ:MATW) and Kobe Steel (OTCMKTS:KBSTF) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Dividends

Matthews International pays an annual dividend of $1.02 per share and has a dividend yield of 4.4%. Kobe Steel pays an annual dividend of $4.78 per share and has a dividend yield of 38.7%. Matthews International pays out -109.7% of its earnings in the form of a dividend. Kobe Steel pays out 24.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Matthews International has increased its dividend for 30 consecutive years.

Profitability

This table compares Matthews International and Kobe Steel’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Matthews International	-2.65%	4.51%	1.45%
Kobe Steel	N/A	N/A	N/A

Analyst Recommendations

This is a summary of recent ratings and price targets for Matthews International and Kobe Steel, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Matthews International	2	0	0	0	1.00
Kobe Steel	0	0	0	0	0.00

Valuation & Earnings

This table compares Matthews International and Kobe Steel”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Matthews International	$1.50 billion	0.48	-$24.47 million	($0.93)	-24.73
Kobe Steel	N/A	N/A	N/A	$19.93	0.62

Kobe Steel has lower revenue, but higher earnings than Matthews International. Matthews International is trading at a lower price-to-earnings ratio than Kobe Steel, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

83.1% of Matthews International shares are held by institutional investors. Comparatively, 11.9% of Kobe Steel shares are held by institutional investors. 4.7% of Matthews International shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Matthews International beats Kobe Steel on 8 of the 12 factors compared between the two stocks.

About Matthews International

Matthews International Corporation provides brand solutions, memorialization products, and industrial technologies worldwide. It operates through three segments: Memorialization, Industrial Technologies, and SGK Brand Solutions. The Memorialization segment provides bronze and granite memorials, upright granite memorials and monuments, concrete burial vaults, cremation memorialization products, granite benches, flower vases, crypt plates and letters, cremation urns, niche units, cemetery features, and statues, as well as bronze plaques, letters, emblems, vases, lights and photo ceramics, granite monuments, mausoleums, crypts, and flush memorials. The Industrial Technologies segment designs, manufactures, services, and distributes high-tech custom energy storage solutions, and product identification and warehouse automation technologies and solutions, including order fulfillment systems for identifying, tracking, picking, and conveying consumer and industrial products. This segment also provides engineered calendaring, laminating, and coating equipment; stand-alone marking products; laser and ink-jet printing systems; and spare parts, calendar, and coating-roller refurbishing and retrofits. The SGK Brand solutions segment provides brand management, pre-media services, printing plates and cylinders, imaging services, digital asset management, merchandising display systems, and marketing and design services for the consumer goods and retail industries. The company was founded in 1850 and is based in Pittsburgh, Pennsylvania.

About Kobe Steel

Kobe Steel, Ltd. engages in the materials, machinery, and electric power businesses worldwide. The company offers steel sheet products, including high-tensile strength, hot and cold rolled, electro-galvanized, and hot-dipped galvanized steel sheets; steel wire rods and bars; and aluminum and steel plates. It also provides steel casting and forging products, such as crankshafts, marine parts, chemical processing equipment, and rolls; materials for plastic molding; and titanium products, copper sheets and strips, and steel powders. In addition, the company offers robots and electric power sources, and welding materials; and machinery products, including standard compressors, tire and rubber machinery products, rotating machinery products, plastic processing machinery products, advanced technology equipment, rolling mill products, and ultra-high-pressure equipment, as well as LNG vaporizers, pressure vessels, brazed aluminum heat exchangers, and micro channel heat exchanger and reactors. Further, it provides signaling, communication, power supply, automatic fare collection, and platform screen door systems; hydraulic and mini hydraulic excavators, mini wheel loaders, and road machinery; construction, metal, forestry, and industrial waste recycling machinery; and crawler and wheel cranes. Additionally, the company generates and supplies electric power; offers material and structural analysis, testing, physical analysis, and other services; manufactures and sells target materials and test equipment; sells and rents detached homes; and provides brokerage, renovation, insurance, and other services, as well as operational management services of public facilities. It also provides services in the field of iron units; and water treatment, waste incineration, PCB detoxification, and soil remediation services. The company was founded in 1905 and is headquartered in Kobe, Japan.