Family Dollar Stores (NYSE: FDO) and Big Lots (NYSE:BIG) are both cyclical consumer goods & services companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitabiliy.

Analyst Ratings

This is a breakdown of recent ratings for Family Dollar Stores and Big Lots, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Family Dollar Stores 0 0 0 0 N/A
Big Lots 0 3 7 1 2.82

Big Lots has a consensus price target of $58.20, suggesting a potential upside of 14.14%. Given Big Lots’ higher possible upside, analysts clearly believe Big Lots is more favorable than Family Dollar Stores.

Dividends

Big Lots pays an annual dividend of $1.00 per share and has a dividend yield of 2.0%. Family Dollar Stores does not pay a dividend. Big Lots pays out 27.2% of its earnings in the form of a dividend. Family Dollar Stores has raised its dividend for 2 consecutive years.

Profitability

This table compares Family Dollar Stores and Big Lots’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Family Dollar Stores 2.93% 17.69% 8.08%
Big Lots 3.20% 29.88% 10.71%

Earnings & Valuation

This table compares Family Dollar Stores and Big Lots’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Family Dollar Stores N/A N/A N/A N/A N/A
Big Lots $5.18 billion 0.44 $368.08 million $3.67 13.89

Big Lots has higher revenue and earnings than Family Dollar Stores.

Summary

Big Lots beats Family Dollar Stores on 8 of the 10 factors compared between the two stocks.

About Family Dollar Stores

Family Dollar Stores, Inc. operates a chain of retail stores. The Company offers a range of merchandise for the whole family, ranging from household cleaners to name brand foods, from health and beauty aids to toys, and from apparel for every age to home fashions. The Company has approximately 10 distribution centers for its supply chain management. The Company has over 8,000 stores within its approximately 50 state operating area. The Company’s subsidiary, Family Dollar Trucking, Inc., services Family Dollar Stores located in southeastern states with localized operations at the corporate fleet offices. The Company offers various categories of products, such as food and beverages, household products, family apparel, personal beauty and care, pet supplies, home decor, electronics, baby care, automotive, hardware, health and wellness, mobile phones, candy, toys and outdoor. The Company’s other product categories include Halloween, Game Day, Holiday, Valentine’s Day and Easter.

About Big Lots

Big Lots, Inc. is a non-traditional, discount retailer operating in the United States. As of January 28, 2017, the Company operated a total of 1,432 stores. The Company operates through the discount retailing segment. As of January 28, 2017, the Company’s stores are located at various states of the United States, such as Alabama, Arizona, California, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Maine, Michigan, Montana, Nevada, Nebraska, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, Texas, Utah and Washington. The Company’s merchandise categories include Furniture, Seasonal, Soft Home, Food, Consumables, Hard Home, and Electronics, Toys, & Accessories.

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