Blue Nile (NASDAQ: NILE) and Signet Jewelers Limited (NYSE:SIG) are both cyclical consumer goods & services companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, earnings and profitabiliy.

Dividends

Signet Jewelers Limited pays an annual dividend of $1.24 per share and has a dividend yield of 2.2%. Blue Nile does not pay a dividend. Signet Jewelers Limited pays out 20.0% of its earnings in the form of a dividend. Blue Nile has increased its dividend for 5 consecutive years.

Profitability

This table compares Blue Nile and Signet Jewelers Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Blue Nile 1.23% 30.85% 4.85%
Signet Jewelers Limited 7.46% 19.20% 7.53%

Institutional & Insider Ownership

99.8% of Blue Nile shares are owned by institutional investors. 5.7% of Blue Nile shares are owned by insiders. Comparatively, 0.5% of Signet Jewelers Limited shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Blue Nile has a beta of 0.07, meaning that its stock price is 93% less volatile than the S&P 500. Comparatively, Signet Jewelers Limited has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Earnings & Valuation

This table compares Blue Nile and Signet Jewelers Limited’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Blue Nile N/A N/A N/A $0.81 50.26
Signet Jewelers Limited $6.52 billion 0.60 $862.50 million $6.21 9.20

Signet Jewelers Limited has higher revenue and earnings than Blue Nile. Signet Jewelers Limited is trading at a lower price-to-earnings ratio than Blue Nile, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings for Blue Nile and Signet Jewelers Limited, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Blue Nile 0 1 0 0 2.00
Signet Jewelers Limited 0 11 7 0 2.39

Signet Jewelers Limited has a consensus target price of $74.71, suggesting a potential upside of 30.83%. Given Signet Jewelers Limited’s stronger consensus rating and higher probable upside, analysts plainly believe Signet Jewelers Limited is more favorable than Blue Nile.

Summary

Signet Jewelers Limited beats Blue Nile on 9 of the 14 factors compared between the two stocks.

About Blue Nile

Blue Nile, Inc. (Blue Nile) is a United States-based company, which operates as an online retailer of diamonds and fine jewelry. The Company’s merchandise consists of engagement and non-engagement products. The engagement product category includes gold or platinum engagement rings with a diamond center stone and loose diamonds. Its non-engagement product category includes rings, wedding bands, earrings, necklaces, pendants, bracelets, gifts and accessories containing precious metals, diamonds, gemstones, or pearls. It offers various types of women’s wedding rings, including Eternity, Signature Diamond, White Gold, Yellow Gold and Rose Gold. It also offers various types of men’s wedding rings, such as Palladium, Tungsten, Tantalum and Titanium. In addition to sales of diamonds and fine jewelry, the Company provides education, guidance and support to enable customers to learn about and purchase diamonds and fine jewelry. It offers its products for sale through the Blue Nile Website.

About Signet Jewelers Limited

Signet Jewelers Limited is a retailer of diamond jewelry. The Company’s segments include the Sterling Jewelers division; the Zale division, which consists of the Zale Jewelry and Piercing Pagoda segments; the UK Jewelry division, and Other. The Sterling Jewelers division’s stores operate in the United States principally as Kay Jewelers (Kay), Kay Jewelers Outlet, Jared The Galleria Of Jewelry (Jared) and Jared Vault. The Zale division operates jewelry stores (Zale Jewelry) and kiosks (Piercing Pagoda), located primarily in shopping malls across the United States, Canada and Puerto Rico. Zale Jewelry includes the United States store brand, Zales, and the Canadian store brand, Peoples Jewellers. Piercing Pagoda operates through mall-based kiosks. The UK Jewelry division operates stores in the United Kingdom, Republic of Ireland and Channel Islands. The Other segment includes the operations of subsidiaries involved in the purchasing and conversion of rough diamonds to polished stones.

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