The Bon-Ton Stores (OTCMKTS: BONT) and Macy’s (NYSE:M) are both retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.

Insider & Institutional Ownership

16.8% of The Bon-Ton Stores shares are owned by institutional investors. Comparatively, 82.3% of Macy’s shares are owned by institutional investors. 45.7% of The Bon-Ton Stores shares are owned by insiders. Comparatively, 1.4% of Macy’s shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares The Bon-Ton Stores and Macy’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Bon-Ton Stores -3.57% N/A -5.09%
Macy’s 2.83% 21.20% 4.66%

Volatility and Risk

The Bon-Ton Stores has a beta of 3.12, meaning that its share price is 212% more volatile than the S&P 500. Comparatively, Macy’s has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for The Bon-Ton Stores and Macy’s, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Bon-Ton Stores 0 0 0 0 N/A
Macy’s 2 11 7 0 2.25

Macy’s has a consensus price target of $25.56, suggesting a potential upside of 1.34%. Given Macy’s’ higher probable upside, analysts clearly believe Macy’s is more favorable than The Bon-Ton Stores.

Dividends

Macy’s pays an annual dividend of $1.51 per share and has a dividend yield of 6.0%. The Bon-Ton Stores does not pay a dividend. Macy’s pays out 66.5% of its earnings in the form of a dividend. Macy’s has increased its dividend for 6 consecutive years.

Valuation and Earnings

This table compares The Bon-Ton Stores and Macy’s’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The Bon-Ton Stores $2.67 billion 0.00 -$63.41 million ($4.45) -0.09
Macy’s $25.78 billion 0.30 $619.00 million $2.27 11.11

Macy’s has higher revenue and earnings than The Bon-Ton Stores. The Bon-Ton Stores is trading at a lower price-to-earnings ratio than Macy’s, indicating that it is currently the more affordable of the two stocks.

Summary

Macy’s beats The Bon-Ton Stores on 12 of the 15 factors compared between the two stocks.

The Bon-Ton Stores Company Profile

The Bon-Ton Stores, Inc. is a department store operator. The Company operates through two segments: stores and eCommerce (its Internet Websites). The Company offers a range of brand-name fashion apparel and accessories for women, men and children. It operates approximately 270 stores in over 26 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates, encompassing a total of approximately 25 million square feet. Its nationally distributed brand assortment includes a range of labels in the apparel, accessories, footwear, cosmetics and home furnishings industries, such as Anne Klein, Calvin Klein, Carters, Chaps, Clarks, Clinique, Coach, Estee Lauder, Fossil, Free People, Frye, Jessica Simpson and Vince Camuto. Its private brand portfolio includes Laura Ashley, Ruff Hewn, Relativity and Casa by Victor Alfaro.

Macy’s Company Profile

Macy’s, Inc. is an omnichannel retail company operating stores, Websites and mobile applications under various brands, such as Macy’s, Bloomingdale’s and Bluemercury. The Company sells a range of merchandise, including apparel and accessories (men’s, women’s and children’s), cosmetics, home furnishings and other consumer goods. Its subsidiaries provide various support functions to its retail operations. Its bank subsidiary, FDS Bank, provides credit processing, certain collections, customer service and credit marketing services in respect of all credit card accounts that are owned either by Department Stores National Bank (DSNB), which is a subsidiary of Citibank N.A., or FDS Bank. The private label brands offered by the Company include Alfani, American Rag, Aqua, Bar III, Belgique, Charter Club, Club Room, Epic Threads, first impressions, Giani Bernini, Greg Norman for Tasso Elba, Holiday Lane, Home Design, Hotel Collection, John Ashford, Karen Scott, Thalia Sodi and lune+aster.

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