Contrasting Barnes & Noble Education (NYSE:BNED) and The Michaels Companies (MIK)
The Michaels Companies (NASDAQ: MIK) and Barnes & Noble Education (NYSE:BNED) are both retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their profitabiliy, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.
Earnings & Valuation
This table compares The Michaels Companies and Barnes & Noble Education’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|The Michaels Companies||$5.20 billion||0.66||$800.72 million||$1.87||9.77|
|Barnes & Noble Education||$1.83 billion||0.26||$69.06 million||$0.05||204.64|
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.
Institutional and Insider Ownership
98.4% of The Michaels Companies shares are owned by institutional investors. Comparatively, 68.5% of Barnes & Noble Education shares are owned by institutional investors. 1.5% of The Michaels Companies shares are owned by insiders. Comparatively, 2.4% of Barnes & Noble Education shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This is a breakdown of recent ratings and recommmendations for The Michaels Companies and Barnes & Noble Education, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The Michaels Companies||0||4||7||0||2.64|
|Barnes & Noble Education||0||0||0||1||4.00|
The Michaels Companies presently has a consensus price target of $27.25, suggesting a potential upside of 49.15%. Barnes & Noble Education has a consensus price target of $14.00, suggesting a potential upside of 36.85%. Given The Michaels Companies’ higher possible upside, equities analysts plainly believe The Michaels Companies is more favorable than Barnes & Noble Education.
Risk & Volatility
The Michaels Companies has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, Barnes & Noble Education has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500.
This table compares The Michaels Companies and Barnes & Noble Education’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|The Michaels Companies||7.30%||-22.75%||18.28%|
|Barnes & Noble Education||0.13%||1.59%||0.83%|
The Michaels Companies beats Barnes & Noble Education on 9 of the 15 factors compared between the two stocks.
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.
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.
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