West Marine (NASDAQ: WMAR) and Barnes & Noble Education (NYSE:BNED) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, earnings, risk, valuation, analyst recommendations, profitability and institutional ownership.

Profitability

This table compares West Marine and Barnes & Noble Education’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
West Marine 1.15% 2.56% 1.83%
Barnes & Noble Education -0.08% -0.12% -0.06%

Valuation & Earnings

This table compares West Marine and Barnes & Noble Education’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
West Marine $697.67 million 0.47 $39.13 million $0.31 41.74
Barnes & Noble Education $1.87 billion 0.14 $78.29 million ($0.04) -139.72

Barnes & Noble Education has higher revenue and earnings than West Marine. Barnes & Noble Education is trading at a lower price-to-earnings ratio than West Marine, indicating that it is currently the more affordable of the two stocks.

Dividends

West Marine pays an annual dividend of $0.20 per share and has a dividend yield of 1.5%. Barnes & Noble Education does not pay a dividend. West Marine pays out 64.5% of its earnings in the form of a dividend.

Volatility & Risk

West Marine has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500. Comparatively, Barnes & Noble Education has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for West Marine and Barnes & Noble Education, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
West Marine 0 2 0 0 2.00
Barnes & Noble Education 0 0 2 0 3.00

West Marine currently has a consensus target price of $10.49, indicating a potential downside of 18.97%. Barnes & Noble Education has a consensus target price of $12.00, indicating a potential upside of 114.67%. Given Barnes & Noble Education’s stronger consensus rating and higher possible upside, analysts plainly believe Barnes & Noble Education is more favorable than West Marine.

Institutional and Insider Ownership

57.9% of West Marine shares are owned by institutional investors. Comparatively, 69.1% of Barnes & Noble Education shares are owned by institutional investors. 27.5% of West Marine shares are owned by insiders. Comparatively, 3.5% of Barnes & Noble Education shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

West Marine beats Barnes & Noble Education on 8 of the 15 factors compared between the two stocks.

West Marine Company Profile

West Marine, Inc. is a waterlife outfitter for cruisers, sailors, anglers and paddlesports enthusiasts. The Company offers a selection of core boating and water recreation products, primarily serving the needs of boat owners and professionals providing services to them. It services its customers through physical stores and two e-commerce Websites. It is a specialty retailer of boating supplies, gear, apparel, footwear and other waterlife-related products. It operates approximately 260 stores located in approximately 40 states, Puerto Rico and Canada. Its products include boating products and merchandise expansion products. Its boating products include maintenance, electronics, sailboat hardware, anchors/docking/moorings, engine systems, boats/outboards, ventilation, navigation, trailering, seating/boat covers and barbecues/appliances. Its merchandise expansion products include clothing accessories, fishing, watersports, paddlesports, coolers and waterlife lifestyle accessories.

Barnes & Noble Education Company Profile

Barnes & Noble Education, Inc. is a contract operator of bookstores on college and university campuses across the United States and a provider of digital education services. The Company offers a support system, and a retail and digital learning experience for students. Through its subsidiary, Barnes & Noble College Booksellers, LLC, the Company operates approximately 750 campus bookstores and the school-branded e-commerce sites for each store, serving over five million college students and their faculty. The Company offers a set of products and services to help students, faculty and administrators achieve their shared educational and social goals. Its suite of product offerings includes Textbook and Course Material Sales, Textbook and Course Material Rentals, General Merchandise, Trade, Digital Education and Brand Partnerships. The Company also offers other merchandise, such as laptops and other technology products, notebooks, backpacks, school and dormitory supplies and related items.

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