Head-To-Head Comparison: Tractor Supply (TSCO) vs. The Michaels Companies (MIK)
Tractor Supply (NASDAQ: TSCO) and The Michaels Companies (NASDAQ:MIK) are both mid-cap retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.
Risk & Volatility
Tractor Supply has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, The Michaels Companies has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.
This is a breakdown of current ratings and recommmendations for Tractor Supply and The Michaels Companies, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The Michaels Companies||0||3||5||0||2.63|
Tractor Supply currently has a consensus target price of $70.39, indicating a potential upside of 19.53%. The Michaels Companies has a consensus target price of $24.29, indicating a potential upside of 16.65%. Given Tractor Supply’s higher probable upside, research analysts clearly believe Tractor Supply is more favorable than The Michaels Companies.
Institutional & Insider Ownership
92.0% of Tractor Supply shares are owned by institutional investors. Comparatively, 98.4% of The Michaels Companies shares are owned by institutional investors. 1.2% of Tractor Supply shares are owned by insiders. Comparatively, 1.5% of The Michaels Companies shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Tractor Supply pays an annual dividend of $1.08 per share and has a dividend yield of 1.8%. The Michaels Companies does not pay a dividend. Tractor Supply pays out 32.5% of its earnings in the form of a dividend.
This table compares Tractor Supply and The Michaels Companies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|The Michaels Companies||7.29%||-22.53%||18.13%|
Valuation and Earnings
This table compares Tractor Supply and The Michaels Companies’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Tractor Supply||$7.04 billion||1.06||$849.82 million||$3.32||17.74|
|The Michaels Companies||$5.21 billion||0.72||$801.02 million||$1.89||11.02|
Tractor Supply has higher revenue and earnings than The Michaels Companies. The Michaels Companies is trading at a lower price-to-earnings ratio than Tractor Supply, indicating that it is currently the more affordable of the two stocks.
Tractor Supply beats The Michaels Companies on 10 of the 16 factors compared between the two stocks.
Tractor Supply Company Profile
Tractor Supply Company is an operator of rural lifestyle retail stores in the United States. The Company is focused on supplying the needs of recreational farmers and ranchers and others, as well as tradesmen and small businesses. It is engaged in the retail sale of products that support the rural lifestyle. The Company operates retail stores under the names Tractor Supply Company, Del’s Feed & Farm Supply and Petsense, and operates Websites under the names TractorSupply.com and Petsense.com. The Company’s selection of merchandise consists of various product categories, including equine, livestock, pet and small animal products; hardware, truck, towing and tool products; seasonal products, including heating, lawn and garden items, power equipment, gifts and toys; work/recreational clothing and footwear, and maintenance products for agricultural and rural use. Its brands include 4health, JobSmart, Bit & Bridle, Paws & Claws, Blue Mountain, Redstone, Dumor, Equistages and Royal Wing.
The Michaels Companies Company Profile
The Michaels Companies, Inc. (Michaels) is an arts and crafts specialty retailer in North America. The Company’s segments include Michaels-U.S., Michaels-Canada, Aaron Brothers, Pat Catan’s and Darice. As of January 28, 2017, the Company operated 1,223 Michaels retail stores in 49 states and Canada, with approximately 18,000 average square feet of selling space per store. It operated 109 Aaron Brothers stores in nine states, with approximately 5,500 average square feet of selling space and 35 Pat Catan’s stores in five states, with approximately 32,000 average square feet of selling space, as of January 28, 2017. The Company also operates an international wholesale business under the Darice brand name. The Company’s stores purchase custom frames, framing supplies and mats from its framing operation and subsidiary, Artistree, Inc. (Artistree), which consists of a manufacturing facility and four regional processing centers.
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