Contrasting Toray Industries (OTCMKTS:TRYIY) & Constellation Software (OTCMKTS:CNSWF)

Toray Industries (OTCMKTS:TRYIY) and Constellation Software (OTCMKTS:CNSWF) are both industrial products companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, dividends, analyst recommendations and valuation.

Profitability

This table compares Toray Industries and Constellation Software’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Toray Industries	0.93%	2.52%	1.29%
Constellation Software	5.95%	77.67%	15.78%

Analyst Ratings

This is a summary of current recommendations and price targets for Toray Industries and Constellation Software, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toray Industries	0	1	0	0	2.00
Constellation Software	0	0	0	0	N/A

Constellation Software has a consensus target price of $1,150.00, suggesting a potential downside of 60.41%. Given Constellation Software’s higher possible upside, analysts clearly believe Constellation Software is more favorable than Toray Industries.

Volatility and Risk

Toray Industries has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500. Comparatively, Constellation Software has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500.

Valuation & Earnings

This table compares Toray Industries and Constellation Software’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toray Industries	$17.07 billion	N/A	$151.68 million	$0.20	46.85
Constellation Software	$8.41 billion	N/A	$565.00 million	$24.83	116.98

Constellation Software has lower revenue, but higher earnings than Toray Industries. Toray Industries is trading at a lower price-to-earnings ratio than Constellation Software, indicating that it is currently the more affordable of the two stocks.

Dividends

Toray Industries pays an annual dividend of $0.13 per share and has a dividend yield of 1.4%. Constellation Software pays an annual dividend of $4.00 per share and has a dividend yield of 0.1%. Toray Industries pays out 65.0% of its earnings in the form of a dividend. Constellation Software pays out 16.1% 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.

Summary

Constellation Software beats Toray Industries on 9 of the 11 factors compared between the two stocks.

About Toray Industries

Toray Industries, Inc., together with its subsidiaries, manufactures, processes, and sells fibers and textiles, performance chemicals, carbon fiber composite materials, environment and engineering products, and life science products in Japan, China, North America, Europe, and internationally. The company offers filament yarns, staple fibers, and spun yarns, as well as woven and knitted fabrics of nylon, polyester, acrylics, and others; non-woven fabrics; ultra-fine fibers; and apparel products. It also provides nylon, ABS, PBT, PPS, and other resins and molded products; polyolefin foam products; polyester, polyethylene, polypropylene, and other films; processed film products; raw materials for synthetic fibers and other plastics; fine chemicals; electronic and information materials; and graphic materials. In addition, the company offers carbon fibers, carbon fiber composite materials, and molded products; analysis, physical evaluation, research, and other services; and pharmaceuticals, medical devices, etc. Further, it provides engineering services; condominiums; industrial equipment and machinery; IT-related equipment; water treatment membranes and related equipment; and materials for housing, building, and civil engineering applications. The company was formerly known as Toyo Rayon Co., Ltd. and changed its name to Toray Industries, Inc. in 1970. The company was incorporated in 1926 and is headquartered in Tokyo, Japan.

About Constellation Software

Constellation Software Inc., together with its subsidiaries, acquires, builds, and manages vertical market software businesses in Canada, the United States, Europe, and internationally. It provides mission critical software solutions for public and private sector markets. The company is also involved in the software licensing; and sale of third-party hardware. In addition, it offers professional, and maintenance and other recurring services. Constellation Software Inc. was incorporated in 1995 and is headquartered in Toronto, Canada.