Analyzing Barnes & Noble Education (BNED) & Winmark (WINA)

Barnes & Noble Education (NYSE: BNED) and Winmark (NASDAQ:WINA) are both small-cap consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Profitability

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This table compares Barnes & Noble Education and Winmark’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Barnes & Noble Education -12.31% -41.88% -18.50%
Winmark 35.22% -186.86% 48.87%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Barnes & Noble Education and Winmark, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Barnes & Noble Education 0 0 2 0 3.00
Winmark 0 0 0 0 N/A

Barnes & Noble Education currently has a consensus price target of $12.00, indicating a potential upside of 83.21%. Given Barnes & Noble Education’s higher probable upside, analysts plainly believe Barnes & Noble Education is more favorable than Winmark.

Dividends

Winmark pays an annual dividend of $0.44 per share and has a dividend yield of 0.3%. Barnes & Noble Education does not pay a dividend. Winmark pays out 7.7% of its earnings in the form of a dividend.

Institutional and Insider Ownership

68.0% of Barnes & Noble Education shares are owned by institutional investors. Comparatively, 49.2% of Winmark shares are owned by institutional investors. 3.5% of Barnes & Noble Education shares are owned by insiders. Comparatively, 37.5% of Winmark shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Barnes & Noble Education and Winmark’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Barnes & Noble Education $1.87 billion 0.16 $5.36 million ($5.76) -1.14
Winmark $69.75 million 7.27 $24.57 million $5.70 23.16

Winmark has lower revenue, but higher earnings than Barnes & Noble Education. Barnes & Noble Education is trading at a lower price-to-earnings ratio than Winmark, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Barnes & Noble Education has a beta of 0.31, meaning that its share price is 69% less volatile than the S&P 500. Comparatively, Winmark has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500.

Summary

Winmark beats Barnes & Noble Education on 8 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 Winmark

Winmark Corporation is a franchisor of five retail store concepts that buy, sell and trade gently used merchandise. The Company operates through two business segments: franchising and leasing. The franchising segment franchises value-oriented retail store concepts that buy, sell, trade and consign merchandise. The leasing segment includes Winmark Capital Corporation, its middle-market equipment leasing business and Wirth Business Credit, Inc., its small-ticket financing business. As of December 31, 2016, the Company had 1,186 franchised stores across the United States and Canada. The Company operates a middle-market equipment leasing business through its subsidiary, Winmark Capital Corporation. Its middle-market leasing business serves large and medium-sized businesses and focuses on technology-based assets. Additionally, the Company operates a small-ticket financing business through its subsidiary, Wirth Business Credit, Inc.

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