Five Below (NASDAQ: FIVE) and J.C. Penney Company, Inc. Holding (NYSE:JCP) are both retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, earnings, risk, profitabiliy, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of recent ratings and price targets for Five Below and J.C. Penney Company, Inc. Holding, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Five Below 0 6 10 0 2.63
J.C. Penney Company, Inc. Holding 1 15 4 0 2.15

Five Below currently has a consensus price target of $53.93, indicating a potential upside of 7.92%. J.C. Penney Company, Inc. Holding has a consensus price target of $6.55, indicating a potential upside of 20.34%. Given J.C. Penney Company, Inc. Holding’s higher possible upside, analysts plainly believe J.C. Penney Company, Inc. Holding is more favorable than Five Below.

Volatility and Risk

Five Below has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500. Comparatively, J.C. Penney Company, Inc. Holding has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500.

Profitability

This table compares Five Below and J.C. Penney Company, Inc. Holding’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Five Below 7.06% 24.02% 15.03%
J.C. Penney Company, Inc. Holding -0.89% 11.44% 1.53%

Earnings and Valuation

This table compares Five Below and J.C. Penney Company, Inc. Holding’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Five Below $1.04 billion 2.65 $143.79 million $1.33 37.57
J.C. Penney Company, Inc. Holding $12.44 billion 0.14 $921.00 million ($0.37) -14.70

J.C. Penney Company, Inc. Holding has higher revenue and earnings than Five Below. J.C. Penney Company, Inc. Holding is trading at a lower price-to-earnings ratio than Five Below, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

77.2% of J.C. Penney Company, Inc. Holding shares are held by institutional investors. 2.9% of Five Below shares are held by insiders. Comparatively, 1.0% of J.C. Penney Company, Inc. Holding shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Five Below beats J.C. Penney Company, Inc. Holding on 10 of the 14 factors compared between the two stocks.

About Five Below

Five Below, Inc. is a specialty retailer offering a range of merchandise for teen and pre-teen customer. The Company offers an assortment of products, including select brands and licensed merchandise across a range of categories, including Style, Room, Sports, Tech, Crafts, Party, Candy and Now. Its product groups include leisure, fashion and home, and party and snack. Its Leisure includes items, such as sporting goods, games, toys, tech, books, electronic accessories, and arts and crafts. Its Fashion and home includes items, such as personal accessories, attitude t-shirts, beauty offerings, home goods and storage options. Its Party and snack includes items, such as party and seasonal goods, greeting cards, candy and other snacks, and beverages. The Company operated 522 locations across over 31 states throughout the Northeast, South and Midwest regions of the United States, as of January 29, 2017. Its typical store featured 4,000 stock-keeping units (SKUs), as of January 29, 2017.

About J.C. Penney Company, Inc. Holding

J. C. Penney Company, Inc. is a holding company. The Company’s business consists of selling merchandise and services to consumers through its department stores and its Website at jcpenney.com. Its department stores and Website generally serve the same type of customers, its Website offers virtually the same mix of merchandise as its store assortment and other categories, and its department stores generally accept returns from sales made in stores and through its Website. It fulfills online customer purchases by direct shipment to the customer from its distribution facilities and stores or from its suppliers’ warehouses and by in store customer pick up. The Company sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products through Sephora inside JCPenney, home furnishings and appliances. In addition, its department stores provide its customers with services, such as styling salon, optical, portrait photography and custom decorating.

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