Staples (NASDAQ: SPLS) and Dover Saddlery (NASDAQ:DOVR) are both cyclical consumer goods & services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Institutional & Insider Ownership

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

Dividends

Staples pays an annual dividend of $0.48 per share and has a dividend yield of 4.7%. Dover Saddlery does not pay a dividend. Staples pays out -126.3% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Staples and Dover Saddlery’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Staples N/A N/A N/A ($0.38) -26.97
Dover Saddlery N/A N/A N/A $0.13 64.85

Staples is trading at a lower price-to-earnings ratio than Dover Saddlery, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Staples and Dover Saddlery’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Staples 1.61% 7.49% 3.33%
Dover Saddlery -3.40% -17.52% -6.75%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Staples and Dover Saddlery, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Staples 0 5 1 0 2.17
Dover Saddlery 0 0 0 0 N/A

Staples currently has a consensus price target of $8.85, suggesting a potential downside of 13.66%. Given Staples’ higher probable upside, research analysts plainly believe Staples is more favorable than Dover Saddlery.

Summary

Staples beats Dover Saddlery on 9 of the 10 factors compared between the two stocks.

Staples Company Profile

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.

Dover Saddlery Company Profile

Dover Saddlery, Inc. is a retailer and omni-channel marketer of equestrian products in the United States. The Company sells its products through omni-channel, including direct and retail. The Company offers a range of products required to own, ride, train and compete with a horse. The Company’s equestrian product line includes a range of separate items such as saddles, tack, specialized apparel, footwear, horse clothing, horse health and stable products. As of December 31, 2013, the Company, through its subsidiaries, operates twenty-one retail stores under the Dover Saddlery brand and one retail store under the Smith Brothers brand. It maintains two catalogs. The Dover Saddlery catalog caters to the mid to high-end, English-style, equestrian products customer. The Smith Brothers catalog is aimed at the Western-style, equestrian products customer. The Company offers web-base marketing through its Websites www.doversaddlery.com and www.smithbrothers.com.

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