Lawson (OTCMKTS:LWSOF – Get Free Report) and Target (NYSE:TGT – Get Free Report) are both consumer defensive companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.
Dividends
Lawson pays an annual dividend of $183.81 per share and has a dividend yield of 397.8%. Target pays an annual dividend of $4.40 per share and has a dividend yield of 3.6%. Lawson pays out 45.4% of its earnings in the form of a dividend. Target pays out 60.4% 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. Target has raised its dividend for 52 consecutive years. Lawson is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
20.1% of Lawson shares are owned by institutional investors. Comparatively, 78.3% of Target shares are owned by institutional investors. 0.2% of Target shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lawson | N/A | N/A | N/A | $404.83 | 0.11 |
| Target | $109.12 billion | 0.52 | $2.78 billion | $7.28 | 16.99 |
Target has higher revenue and earnings than Lawson. Lawson is trading at a lower price-to-earnings ratio than Target, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current recommendations for Lawson and Target, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lawson | 0 | 4 | 0 | 0 | 2.00 |
| Target | 0 | 17 | 13 | 0 | 2.43 |
Target has a consensus price target of $159.66, suggesting a potential upside of 29.06%. Given Target’s stronger consensus rating and higher possible upside, analysts clearly believe Target is more favorable than Lawson.
Profitability
This table compares Lawson and Target’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lawson | N/A | N/A | N/A |
| Target | 3.12% | 29.43% | 6.30% |
Summary
Target beats Lawson on 11 of the 14 factors compared between the two stocks.
About Lawson
Lawson, Inc. operates and franchises convenience stores under the Lawson, Lawson Store 100, and Natural Lawson names in Japan and internationally. It operates through Domestic Convenience Store Business, Seijo Ishii Business, Entertainment-Related Business, Financial-Related Business, and Overseas Business segments. The company is also involved in the wholesale of processed foods, frozen foods and other meat products, packaging materials, etc.; operation of a chain of supermarkets; and food production and restaurant businesses. In addition, it engages in the development of a general entertainment enterprises; operation of HMV stores, as well as integrated entertainment mall under the Lawson Hot Station L Paca name; construction and operation of movie theater complexes; and consulting and banking businesses. Further, the company is involved in the sale of CDs/DVDs, books/electronic books, and other goods; and entertainment merchandises, such as tickets for concerts, etc. through stores and online. Lawson, Inc. was formerly known as Daiei Convenience Systems, Co. Ltd. and changed its name to Lawson, Inc. in June 1996. The company was incorporated in 1975 and is headquartered in Tokyo, Japan. Lawson, Inc. is a subsidiary of Mitsubishi Corporation.
About Target
Target Corporation operates as a general merchandise retailer in the United States. The company offers apparel for women, men, boys, girls, toddlers, and infants and newborns, as well as jewelry, accessories, and shoes; and beauty and personal care, baby gear, cleaning, paper products, and pet supplies. It also provides dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, and food service; electronics, which includes video game hardware and software, toys, entertainment, sporting goods, and luggage; and furniture, lighting, storage, kitchenware, small appliances, home décor, bed and bath, home improvement, school/office supplies, greeting cards and party supplies, and other seasonal merchandise. In addition, the company sells merchandise through periodic design and creative partnerships, and shop-in-shop experience; and in-store amenities. Further, it sells its products through its stores; and digital channels, including Target.com. Target Corporation was incorporated in 1902 and is headquartered in Minneapolis, Minnesota.
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