Tuesday Morning Corp. (NASDAQ: TUES) and PriceSmart (NASDAQ:PSMT) are both retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, profitability, valuation, dividends, institutional ownership and earnings.

Institutional and Insider Ownership

79.8% of Tuesday Morning Corp. shares are held by institutional investors. Comparatively, 72.0% of PriceSmart shares are held by institutional investors. 4.4% of Tuesday Morning Corp. shares are held by insiders. Comparatively, 28.0% of PriceSmart shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Tuesday Morning Corp. and PriceSmart’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tuesday Morning Corp. -3.37% -15.09% -8.30%
PriceSmart 3.13% 14.05% 8.26%

Dividends

PriceSmart pays an annual dividend of $0.70 per share and has a dividend yield of 0.9%. Tuesday Morning Corp. does not pay a dividend. PriceSmart pays out 22.7% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Tuesday Morning Corp. and PriceSmart’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tuesday Morning Corp. $966.66 million 0.11 -$10.93 million ($0.74) -3.18
PriceSmart $2.97 billion 0.83 $184.93 million $3.08 26.44

PriceSmart has higher revenue and earnings than Tuesday Morning Corp.. Tuesday Morning Corp. is trading at a lower price-to-earnings ratio than PriceSmart, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Tuesday Morning Corp. has a beta of 2.11, suggesting that its share price is 111% more volatile than the S&P 500. Comparatively, PriceSmart has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Tuesday Morning Corp. and PriceSmart, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tuesday Morning Corp. 0 3 0 0 2.00
PriceSmart 0 0 1 0 3.00

Tuesday Morning Corp. currently has a consensus target price of $2.45, suggesting a potential upside of 4.26%. PriceSmart has a consensus target price of $102.00, suggesting a potential upside of 25.23%. Given PriceSmart’s stronger consensus rating and higher possible upside, analysts clearly believe PriceSmart is more favorable than Tuesday Morning Corp..

Summary

PriceSmart beats Tuesday Morning Corp. on 12 of the 15 factors compared between the two stocks.

Tuesday Morning Corp. Company Profile

Tuesday Morning Corporation is an off-price retailer. The Company specializes in selling discounted, upscale decorative home accessories, housewares, seasonal goods and famous-maker gifts. The Company operated 751 stores in 40 states in the United States, as of June 30, 2016. The Company offers products in a range of categories, such as home decor, furniture, bed and bath, kitchen, toys, crafts, pets and seasonal goods. The Company offers branded merchandise, such as Peacock Alley, Sferra, Lenox, Waterford and Hartmann. In addition to branded goods, it also carries home furnishings items made around the world. The Company’s stores operate in both primary and secondary locations of the suburban markets, such as strip malls, near its middle and upper-income customers. The Company utilizes distribution center facilities in Dallas, Texas and Phoenix, Arizona.

PriceSmart Company Profile

PriceSmart, Inc., through its subsidiaries, is engaged in the international operation of membership shopping in warehouse clubs. In addition, the Company operates distribution centers and offices in the United States. The Company’s segments include the United States, Central America, the Caribbean and Colombia. The Company owns and operates the United States-style membership shopping warehouse clubs in Latin America and the Caribbean. It offers private label consumer goods to individuals and businesses. The Company offers three types of memberships, such as Business, Diamond and in Costa Rica Platinum memberships. It promotes Business membership through its marketing programs and offers certain merchandise targeted to businesses, such as restaurants, hotels, convenience stores, offices and institutions. The Diamond membership is focused on individuals and families. The Company offers Platinum memberships in Costa Rica.

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