Kohl’s Corporation (KSS) versus Macy’s (M) Financial Analysis
Kohl’s Corporation (NYSE: KSS) and Macy’s (NYSE:M) are both mid-cap retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitabiliy, institutional ownership, earnings, valuation, risk and analyst recommendations.
Insider & Institutional Ownership
84.5% of Macy’s shares are held by institutional investors. 1.2% of Kohl’s Corporation shares are held by company insiders. Comparatively, 1.4% of Macy’s shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Risk & Volatility
Kohl’s Corporation has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, Macy’s has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500.
Kohl’s Corporation pays an annual dividend of $2.20 per share and has a dividend yield of 5.5%. Macy’s pays an annual dividend of $1.51 per share and has a dividend yield of 6.4%. Kohl’s Corporation pays out 64.1% of its earnings in the form of a dividend. Macy’s pays out 81.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kohl’s Corporation has raised its dividend for 6 consecutive years and Macy’s has raised its dividend for 6 consecutive years.
Earnings & Valuation
This table compares Kohl’s Corporation and Macy’s’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Kohl’s Corporation||$18.56 billion||0.37||$2.33 billion||$3.43||11.73|
|Macy’s||$25.35 billion||0.28||$2.76 billion||$1.85||12.72|
Macy’s has higher revenue and earnings than Kohl’s Corporation. Kohl’s Corporation is trading at a lower price-to-earnings ratio than Macy’s, indicating that it is currently the more affordable of the two stocks.
This table compares Kohl’s Corporation and Macy’s’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent ratings for Kohl’s Corporation and Macy’s, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Kohl’s Corporation presently has a consensus price target of $43.22, indicating a potential upside of 7.38%. Macy’s has a consensus price target of $31.47, indicating a potential upside of 33.70%. Given Macy’s’ stronger consensus rating and higher probable upside, analysts clearly believe Macy’s is more favorable than Kohl’s Corporation.
Macy’s beats Kohl’s Corporation on 10 of the 16 factors compared between the two stocks.
About Kohl’s Corporation
Kohl’s Corporation (Kohl’s) is an operator of department stores. The Company operates approximately 1,154 Kohl’s department stores, a Website (www.Kohls.com), approximately 12 FILA outlets, and approximately three Off-Aisle clearance centers. The Company’s stores and Website sell moderately-priced private label and national brand apparel, footwear, accessories, beauty and home products. The Company’s Website includes merchandise that is available in its stores, as well as merchandise that is available only online. The Company’s merchandise mix includes both national brands and private brands that are available only at Kohl’s. The Company’s private brands include Apt. 9, Croft & Barrow, Jumping Beans, SO and Sonoma Goods for Life. The Company’s exclusive brands include Food Network, Jennifer Lopez, Marc Anthony, Rock & Republic and Simply Vera Vera Wang.
Macy’s, Inc. is an omnichannel retail company operating stores, Websites and mobile applications under various brands, such as Macy’s, Bloomingdale’s and Bluemercury. The Company sells a range of merchandise, including apparel and accessories (men’s, women’s and children’s), cosmetics, home furnishings and other consumer goods. Its subsidiaries provide various support functions to its retail operations. Its bank subsidiary, FDS Bank, provides credit processing, certain collections, customer service and credit marketing services in respect of all credit card accounts that are owned either by Department Stores National Bank (DSNB), which is a subsidiary of Citibank N.A., or FDS Bank. The private label brands offered by the Company include Alfani, American Rag, Aqua, Bar III, Belgique, Charter Club, Club Room, Epic Threads, first impressions, Giani Bernini, Greg Norman for Tasso Elba, Holiday Lane, Home Design, Hotel Collection, John Ashford, Karen Scott, Thalia Sodi and lune+aster.
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