Reviewing Seven and I (OTCMKTS:SVNDY) & Alibaba Group (NYSE:BABA)

Seven and I (OTCMKTS:SVNDY) and Alibaba Group (NYSE:BABA) are both large-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.

Profitability

This table compares Seven and I and Alibaba Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Seven and I	3.03%	7.87%	3.06%
Alibaba Group	7.00%	4.79%	2.80%

Earnings & Valuation

This table compares Seven and I and Alibaba Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Seven and I	$69.63 billion	0.42	$1.96 billion	$0.83	15.08
Alibaba Group	$148.40 billion	1.80	$15.02 billion	$4.13	26.01

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Seven and I and Alibaba Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Seven and I	0	2	0	0	2.00
Alibaba Group	0	5	13	2	2.85

Alibaba Group has a consensus target price of $186.33, suggesting a potential upside of 73.49%. Given Alibaba Group’s stronger consensus rating and higher possible upside, analysts plainly believe Alibaba Group is more favorable than Seven and I.

Insider & Institutional Ownership

0.0% of Seven and I shares are held by institutional investors. Comparatively, 13.5% of Alibaba Group shares are held by institutional investors. 12.5% of Alibaba Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Seven and I pays an annual dividend of $0.19 per share and has a dividend yield of 1.5%. Alibaba Group pays an annual dividend of $1.03 per share and has a dividend yield of 1.0%. Seven and I pays out 22.9% of its earnings in the form of a dividend. Alibaba Group pays out 24.9% 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. Seven and I is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Seven and I has a beta of 0.32, suggesting that its share price is 68% less volatile than the S&P 500. Comparatively, Alibaba Group has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500.

Summary

Alibaba Group beats Seven and I on 13 of the 17 factors compared between the two stocks.

About Seven and I

Seven & i Holdings Co., Ltd. operates convenience stores, superstores, department stores, supermarkets, and specialty stores. It operates through six segments: Domestic Convenience Store operations, Overseas Convenience Store Operations, Superstore Operations, Department and Specialty Store Operations, Financial Services, and Others. The company engages in the operation of convenience stores comprising directly managed corporate stores and franchised stores; retail business that provides daily life necessities, such as food and other daily necessities and dollar merchandise and services; banking, leasing, and credit card business; and real estate business. Seven & i Holdings Co., Ltd. was incorporated in 2005 and is headquartered in Tokyo, Japan.

About Alibaba Group

Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People's Republic of China and internationally. The company operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao, a digital retail platform; Tmall, a third-party online and mobile commerce platform; Alimama, a monetization platform; 1688.com and Alibaba.com, which are online wholesale marketplaces; AliExpress, a retail marketplace; Lazada, Trendyol, and Daraz that are e-commerce platforms; Freshippo, a retail platform for groceries and fresh goods; and Tmall Global, an import e-commerce platform. The company also operates Cainiao Network logistic services platform; Ele.me, an on-demand delivery and local services platform; Koubei, a restaurant and local services guide platform; and Fliggy, an online travel platform. In addition, it offers pay-for-performance, in-feed, and display marketing services; and Taobao Ad Network and Exchange, a real-time online bidding marketing exchange. Further, the company provides elastic computing, storage, network, security, database, big data, and IoT services; and hardware, software license, software installation, and application development and maintenance services. Additionally, it operates Youku, an online video platform; Quark, a platform for information search, storage, and consumption; Alibaba Pictures and other content platforms that provide online videos, films, live events, news feeds, literature, music, and others; Amap, a mobile digital map, navigation, and real-time traffic information app; DingTalk, a business efficiency mobile app; and Tmall Genie smart speaker. The company was incorporated in 1999 and is based in Hangzhou, the People's Republic of China.