Cabela’s (NYSE: CAB) and Rent-A-Center (NASDAQ:RCII) are both retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, profitabiliy, analyst recommendations, institutional ownership, dividends, valuation and risk.

Profitability

This table compares Cabela’s and Rent-A-Center’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cabela’s 3.49% 8.97% 2.02%
Rent-A-Center -4.77% -30.44% -7.06%

Volatility & Risk

Cabela’s has a beta of 0.15, meaning that its stock price is 85% less volatile than the S&P 500. Comparatively, Rent-A-Center has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500.

Insider and Institutional Ownership

58.2% of Cabela’s shares are held by institutional investors. 21.0% of Cabela’s shares are held by insiders. Comparatively, 3.4% of Rent-A-Center shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Cabela’s and Rent-A-Center’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cabela’s $4.10 billion 1.00 $468.84 million $2.08 28.73
Rent-A-Center $2.87 billion 0.23 $145.79 million N/A N/A

Cabela’s has higher revenue and earnings than Rent-A-Center.

Analyst Ratings

This is a summary of current ratings and recommmendations for Cabela’s and Rent-A-Center, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cabela’s 0 8 1 0 2.11
Rent-A-Center 2 3 2 1 2.25

Cabela’s currently has a consensus price target of $59.36, indicating a potential downside of 0.67%. Rent-A-Center has a consensus price target of $10.75, indicating a potential downside of 14.00%. Given Cabela’s’ higher possible upside, equities analysts clearly believe Cabela’s is more favorable than Rent-A-Center.

Dividends

Rent-A-Center pays an annual dividend of $0.32 per share and has a dividend yield of 2.6%. Cabela’s does not pay a dividend.

Summary

Cabela’s beats Rent-A-Center on 9 of the 14 factors compared between the two stocks.

About Cabela’s

Cabela’s Incorporated is an omni-channel retailer of hunting, fishing, camping, shooting sports and related outdoor merchandise. The Company offers its customers a selection of national and regional brand products, including its Cabela’s brand. The Company’s segments include Merchandising and Financial Services. The Merchandising segment sells products and services through the Company’s retail stores, its e-commerce Websites (Cabelas.com and Cabelas.ca), and its catalogs. The United States merchandising and Canada merchandising operating segments have been aggregated into its Merchandising segment. The Financial Services segment issues co-branded credit cards, which are available through all of its channels. The Company’s product assortment includes merchandise and equipment for hunting, fishing, marine use, camping, and recreational sport shooting, along with casual and outdoor apparel and footwear, optics, vehicle accessories, and gifts and home furnishings with an outdoor theme.

About Rent-A-Center

Rent-A-Center, Inc. is a rent-to-own operator in North America. The Company provides an opportunity to obtain ownership of products, such as consumer electronics, appliances, computers (including tablets), smartphones and furniture (including accessories), under rental purchase agreements. The Company operates in four segments: Core U.S., Acceptance Now, Mexico, and Franchising. As of December 31, 2016, the Company operated over 2,463 Company-owned stores in the United States, Canada and Puerto Rico. The Company’s Mexico segment consists of the Company-owned rent-to-own stores in Mexico. As of December 31, 2016, the Company operated 130 stores in this segment. Its Franchising segment engages in the sale of rental merchandise to its franchisees. As of December 31, 2016, the Company’s Franchising segment franchised 229 stores in 31 states operating under the Rent-A-Center (152 stores), ColorTyme (39 stores) and RimTyme (38 stores) names.

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