Macy’s (NYSE: M) and The Bon-Ton Stores (OTCMKTS:BONT) are both cyclical consumer goods & services companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, profitability, risk, analyst recommendations and dividends.

Insider and Institutional Ownership

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

Profitability

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

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

Risk and Volatility

Macy’s has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, The Bon-Ton Stores has a beta of 3.13, suggesting that its share price is 213% more volatile than the S&P 500.

Dividends

Macy’s pays an annual dividend of $1.51 per share and has a dividend yield of 5.8%. The Bon-Ton Stores does not pay a dividend. Macy’s pays out 66.5% of its earnings in the form of a dividend. The Bon-Ton Stores has increased its dividend for 6 consecutive years.

Analyst Recommendations

This is a summary of current ratings for Macy’s and The Bon-Ton Stores, as reported by MarketBeat.com.

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

Macy’s currently has a consensus target price of $25.56, suggesting a potential downside of 1.05%. Given Macy’s’ higher possible upside, equities analysts plainly believe Macy’s is more favorable than The Bon-Ton Stores.

Earnings & Valuation

This table compares Macy’s and The Bon-Ton Stores’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Macy’s $25.78 billion 0.31 $619.00 million $2.27 11.38
The Bon-Ton Stores $2.67 billion 0.00 -$63.41 million ($4.60) -0.09

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 11 of the 15 factors compared between the two stocks.

About Macy’s

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.

About The Bon-Ton Stores

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.

Receive News & Ratings for Macy's Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Macy's and related companies with MarketBeat.com's FREE daily email newsletter.