Sumitomo (OTCMKTS:SSUMY) versus Griffon (NYSE:GFF) Head to Head Review

Sumitomo (OTCMKTS:SSUMY) and Griffon (NYSE:GFF) are both multi-sector conglomerates companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, earnings, risk and dividends.

Dividends

Sumitomo pays an annual dividend of $0.77 per share and has a dividend yield of 2.4%. Griffon pays an annual dividend of $0.72 per share and has a dividend yield of 1.0%. Sumitomo pays out 22.7% of its earnings in the form of a dividend. Griffon pays out 53.7% 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. Griffon has increased its dividend for 1 consecutive years. Sumitomo is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and target prices for Sumitomo and Griffon, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sumitomo	0	0	0	2	4.00
Griffon	0	2	3	2	3.00

Griffon has a consensus target price of $98.20, suggesting a potential upside of 40.57%. Given Griffon’s higher probable upside, analysts clearly believe Griffon is more favorable than Sumitomo.

Risk & Volatility

Sumitomo has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500. Comparatively, Griffon has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.

Profitability

This table compares Sumitomo and Griffon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sumitomo	8.34%	12.52%	5.24%
Griffon	2.78%	144.21%	11.56%

Institutional & Insider Ownership

73.2% of Griffon shares are held by institutional investors. 10.2% of Griffon shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Sumitomo and Griffon”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sumitomo	$47.89 billion	0.80	$3.75 billion	$3.39	9.37
Griffon	$2.52 billion	1.29	$209.90 million	$1.34	52.13

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

Summary

Griffon beats Sumitomo on 10 of the 17 factors compared between the two stocks.

About Sumitomo

Sumitomo Corporation engages in general trading business worldwide. It operates through six segments: Metal Products; Transportation & Construction Systems; Infrastructure; Media & Digital; Living Related & Real Estate; and Mineral Resources, Energy, Chemical & Electronics. The company provides steel sheets and tubular products; and manufactures, leases, sells, services, and finances ships, aircrafts, motor vehicles, construction equipment, and components and parts. It is involved in the development of renewable energy projects comprising power generation and power plant engineering, procurement, and construction activities; electricity retail; industrial facilities and equipment, water, transportation systems and infrastructure, airports, smart city project, environmental solutions, and storage battery businesses; development and operation of industrial parks; arranging insurance; and provision of logistics services. In addition, the company engages in the cable television, 5G related technologies, programming distribution, movies, digital media and video content, TV shopping, and e-commerce businesses; cell phone, ICT platform, digital solution, and venture capital businesses; provision of smart communications infrastructure; operation of food supermarkets and drugstore chains; trade of cement and building materials; and real estate businesses. Further, it develops and trades in coal, iron ore, manganese, uranium, non-ferrous and precious metals, petroleum, natural gas and liquefied natural gas, and commodity derivative transactions; trades in non-ferrous metal products, liquefied petroleum gas, storage batteries, carbon products, plastics, organic and inorganic chemicals, silicon wafers, LEDs, pharmaceuticals, agricultural chemicals, household insecticides, fertilizers, and veterinary drugs; engages in the investing activities; and provides electronics manufacturing services. Sumitomo Corporation was incorporated in 1919 and is headquartered in Tokyo, Japan.

About Griffon

Griffon Corporation, through its subsidiaries, provides consumer and professional, and home and building products in the United States, Europe, Canada, Australia, and internationally. The company operates through two segments: Home and Building Products, and Consumer and Professional Products. The Home and Building Products segment manufactures and markets residential and commercial sectional garage doors, rolling steel service doors, fire doors, shutters, steel security grilles, and room dividers for the use in commercial construction and repair, and home remodeling applications. The segment also sells related products, such as garage door openers. The Consumer and Professional Products segment manufactures and markets long-handled engineered tools, including spades, hoes, cultivators, weeders, post hole diggers, scrapers, edgers and forks; wheelbarrows and lawn carts; snow tools comprising pushers, roof rakes, sled sleigh shovels, scoops, and ice scrapers; and pruning products, such as pruners, loppers, shears, and other tools. The segment also offers striking tools, including axes, picks, mattocks, mauls, wood splitters, sledgehammers, pry bars, and repair handles; traditional and gardening hand tools comprising hammers, screwdrivers, pliers, adjustable wrenches, handsaws, tape measures, levels, clamps, trowels, cultivators, weeders, and other hand tools; indoor and outdoor planters and lawn accessories; and garden hoses and hose reels. In addition, the segment provides home organization products, including wire and wood shelving, containers, storage cabinets, and other closet and home organization accessories; residential, industrial, and commercial fans; and cleaning products, such as brooms, brushes, squeegees, and other cleaning products. The company was formerly known as Instrument Systems Corporation and changed its name to Griffon Corporation in June 1992. Griffon Corporation was founded in 1774 and is headquartered in New York, New York.