Ollie’s Bargain Outlet Holdings (NASDAQ: OLLI) and Staples (NASDAQ:SPLS) are both mid-cap consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, dividends, risk, profitability and institutional ownership.

Earnings & Valuation

This table compares Ollie’s Bargain Outlet Holdings and Staples’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ollie’s Bargain Outlet Holdings $967.59 million 2.90 $127.79 million $1.15 39.83
Staples $17.91 billion 0.38 $1.22 billion ($2.35) -4.36

Staples has higher revenue and earnings than Ollie’s Bargain Outlet Holdings. Staples is trading at a lower price-to-earnings ratio than Ollie’s Bargain Outlet Holdings, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

92.2% of Ollie’s Bargain Outlet Holdings shares are owned by institutional investors. Comparatively, 85.6% of Staples shares are owned by institutional investors. 22.3% of Ollie’s Bargain Outlet Holdings shares are owned by insiders. Comparatively, 0.7% of Staples shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for Ollie’s Bargain Outlet Holdings and Staples, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ollie’s Bargain Outlet Holdings 0 4 5 0 2.56
Staples 0 5 1 0 2.17

Ollie’s Bargain Outlet Holdings currently has a consensus price target of $46.57, suggesting a potential upside of 1.68%. Staples has a consensus price target of $8.85, suggesting a potential downside of 13.66%. Given Ollie’s Bargain Outlet Holdings’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Ollie’s Bargain Outlet Holdings is more favorable than Staples.

Volatility and Risk

Ollie’s Bargain Outlet Holdings has a beta of 0.17, indicating that its share price is 83% less volatile than the S&P 500. Comparatively, Staples has a beta of 1.74, indicating that its share price is 74% more volatile than the S&P 500.

Dividends

Staples pays an annual dividend of $0.48 per share and has a dividend yield of 4.7%. Ollie’s Bargain Outlet Holdings does not pay a dividend. Staples pays out -20.4% of its earnings in the form of a dividend.

Profitability

This table compares Ollie’s Bargain Outlet Holdings and Staples’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ollie’s Bargain Outlet Holdings 7.60% 10.44% 6.78%
Staples -8.53% 15.09% 6.94%

Summary

Ollie’s Bargain Outlet Holdings beats Staples on 8 of the 15 factors compared between the two stocks.

About Ollie’s Bargain Outlet Holdings

Ollie’s Bargain Outlet Holdings, Inc. is a retailer of brand name merchandise. The Company offers customers a selection of brand name products, including food, housewares, books and stationery, bed and bath, floor coverings, electronics and toys. Its warehouse format stores feature a range of products, including hardware, personal healthcare, candy, clothing, sporting goods, pet and lawn and garden products. It offers cooking utensils, dishes, appliances, plastic containers, coffee, bottled non-carbonated beverages, coffee, bottled non-carbonated beverages, bedding, towels, curtains, laminate flooring, commercial and residential carpeting, air conditioners, home electronics, cellular accessories, dolls, action figures, puzzles, action figures, puzzles, educational toys, board games, luggage, automotive, seasonal, furniture, summer furniture and lawn and garden. As of January 28, 2017, it had operated 234 stores across 19 contiguous states in the Eastern half of the United States.

About Staples

Staples, Inc. (Staples) is a provider of products and services that serve the needs of business customers and consumers. The Company offers a range of print and marketing and technology services. The Company’s segments include North American Delivery, North American Retail and Other. The North American Delivery segment consists of the United States and Canadian businesses, including Staples Business Advantage, staples.com, staples.ca, and quill.com, that sell and deliver products and services primarily to businesses. The North American Retail segment includes its retail stores in the United States and Canada. As of January 28, 2017, its North American Retail segment consisted of 1,255 stores in the United States and 304 stores in Canada. The Company has other businesses in Australia, South America and Asia. Staples Australia serves primarily contract and government customers in Australia and New Zealand. The Company also has operations in China, Argentina, Taiwan and Brazil.

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