Barnes & Noble Education (NYSE: BNED) and The Michaels Companies (NASDAQ:MIK) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, institutional ownership, valuation, dividends and profitabiliy.
Risk & Volatility
Barnes & Noble Education has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, The Michaels Companies has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.
This table compares Barnes & Noble Education and The Michaels Companies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Barnes & Noble Education||0.29%||1.15%||0.58%|
|The Michaels Companies||7.30%||-22.75%||18.28%|
This is a breakdown of recent ratings and price targets for Barnes & Noble Education and The Michaels Companies, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Barnes & Noble Education||0||0||1||0||3.00|
|The Michaels Companies||0||4||7||0||2.64|
Barnes & Noble Education presently has a consensus price target of $14.00, suggesting a potential upside of 102.31%. The Michaels Companies has a consensus price target of $25.43, suggesting a potential upside of 26.32%. Given Barnes & Noble Education’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Barnes & Noble Education is more favorable than The Michaels Companies.
Earnings & Valuation
This table compares Barnes & Noble Education and The Michaels Companies’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Barnes & Noble Education||$1.87 billion||0.17||$78.29 million||$0.11||62.91|
|The Michaels Companies||$5.20 billion||0.73||$800.72 million||$1.87||10.76|
The Michaels Companies has higher revenue and earnings than Barnes & Noble Education. The Michaels Companies is trading at a lower price-to-earnings ratio than Barnes & Noble Education, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
68.9% of Barnes & Noble Education shares are owned by institutional investors. Comparatively, 98.4% of The Michaels Companies shares are owned by institutional investors. 2.4% of Barnes & Noble Education shares are owned by company insiders. Comparatively, 1.5% of The Michaels Companies shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
The Michaels Companies beats Barnes & Noble Education on 9 of the 14 factors compared between the two stocks.
About Barnes & Noble Education
Barnes & Noble Education, Inc. is a contract operator of bookstores on college and university campuses across the United States and a provider of digital education services. The Company offers a support system, and a retail and digital learning experience for students. Through its subsidiary, Barnes & Noble College Booksellers, LLC, the Company operates approximately 750 campus bookstores and the school-branded e-commerce sites for each store, serving over five million college students and their faculty. The Company offers a set of products and services to help students, faculty and administrators achieve their shared educational and social goals. Its suite of product offerings includes Textbook and Course Material Sales, Textbook and Course Material Rentals, General Merchandise, Trade, Digital Education and Brand Partnerships. The Company also offers other merchandise, such as laptops and other technology products, notebooks, backpacks, school and dormitory supplies and related items.
About The Michaels Companies
The Michaels Companies, Inc. (Michaels) is an arts and crafts specialty retailer in North America. The Company’s segments include Michaels-U.S., Michaels-Canada, Aaron Brothers, Pat Catan’s and Darice. As of January 28, 2017, the Company operated 1,223 Michaels retail stores in 49 states and Canada, with approximately 18,000 average square feet of selling space per store. It operated 109 Aaron Brothers stores in nine states, with approximately 5,500 average square feet of selling space and 35 Pat Catan’s stores in five states, with approximately 32,000 average square feet of selling space, as of January 28, 2017. The Company also operates an international wholesale business under the Darice brand name. The Company’s stores purchase custom frames, framing supplies and mats from its framing operation and subsidiary, Artistree, Inc. (Artistree), which consists of a manufacturing facility and four regional processing centers.
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