Financial Contrast: China Shenhua Energy (OTCMKTS:CSUAY) vs. Secom (OTCMKTS:SOMLY)

Secom (OTCMKTS:SOMLY) and China Shenhua Energy (OTCMKTS:CSUAY) are both large-cap business services companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, valuation, analyst recommendations, profitability and earnings.

Profitability

This table compares Secom and China Shenhua Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Secom	8.85%	7.55%	5.08%
China Shenhua Energy	17.97%	13.20%	9.96%

Valuation and Earnings

This table compares Secom and China Shenhua Energy’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Secom	$8.00 billion	1.70	$706.22 million	$0.84	17.36
China Shenhua Energy	$48.54 billion	2.08	$9.14 billion	$1.73	11.71

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for Secom and China Shenhua Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Secom	0	0	0	0	N/A
China Shenhua Energy	0	0	1	0	3.00

Dividends

Secom pays an annual dividend of $0.10 per share and has a dividend yield of 0.7%. China Shenhua Energy pays an annual dividend of $1.05 per share and has a dividend yield of 5.2%. Secom pays out 11.9% of its earnings in the form of a dividend. China Shenhua Energy pays out 60.7% 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.

Risk & Volatility

Secom has a beta of 0.39, indicating that its share price is 61% less volatile than the S&P 500. Comparatively, China Shenhua Energy has a beta of 0.12, indicating that its share price is 88% less volatile than the S&P 500.

Summary

China Shenhua Energy beats Secom on 9 of the 12 factors compared between the two stocks.

About Secom

SECOM CO., LTD., together with its subsidiaries, provides security services in Japan and internationally. The company operates through Security Services, Fire Protection Services, Medical Services, Insurance Services, Geospatial Information Services, BPO and ICT Services, and Other Services. The Security Services segment offers static guard, armored car, merchandise, and other services, as well as online security systems. The Fire Protection Services segment provides fire alarm systems, fire extinguishing systems, and maintenance services to office buildings, production facilities, tunnels, cultural properties, ships, and residences. The Medical Services segment offers home nursing, pharmaceutical dispensing, home delivery services, health and preventative care services, and personal and outpatient care services; and cloud-based medical reporting services and SECOM LINKus application. This segment also operates the general hospital and residences for seniors; and sells medical equipment and pharmaceuticals. The Insurance Services Segment provides fire insurance, automobile insurance, and cancer treatment insurance services. The Geospatial Information Services segment offers geospatial information services to public-sector entities, such as national and local governments; private sector customers; and overseas government agencies. The BPO and ICT Services segment provides contact centers and back office support services, data center, disaster preparedness, information security, and cloud-based services, as well as SaaS solutions. The Other Services segment offers real estate leasing, construction, and installation services. The company was incorporated in 1962 and is headquartered in Tokyo, Japan.

About China Shenhua Energy

China Shenhua Energy Company Limited, together with its subsidiaries, engages in the production and sale of coal and power; railway, port, and shipping transportation; and coal-to-olefins businesses in the People's Republic of China and internationally. It operates through six segments: Coal, Power Generation, Railway, Port, Shipping, and Coal Chemical. The Coal segment produces coal from surface and underground mines; and sells coal to power plants and metallurgical and coal chemical producers. The Power segment generates electric power through thermal, wind, water, and gas; and sells electric power to power grid companies. The Railway segment provides railway transportation services. The Port segment offers loading, transportation, and storage services. The Shipping segment provides shipment transportation services. The Coal Chemical segment produces and sells methanol; and polyethylene and polypropylene, as well as other by-products. The company was incorporated in 2004 and is based in Beijing, the People's Republic of China. China Shenhua Energy Company Limited operates as a subsidiary of China Energy Investment Corporation Limited.