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

Earnings and Valuation

This table compares The Bon-Ton Stores and Sears’ revenue, earnings per share 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 ($4.60) -0.08
Sears $22.14 billion 0.02 -$2.22 billion ($10.92) -0.35

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

Volatility and Risk

The Bon-Ton Stores has a beta of 3.13, suggesting that its stock price is 213% more volatile than the S&P 500. Comparatively, Sears has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.

Institutional and Insider Ownership

16.7% of The Bon-Ton Stores shares are owned by institutional investors. Comparatively, 60.1% of Sears shares are owned by institutional investors. 45.7% of The Bon-Ton Stores shares are owned by company insiders. Comparatively, 89.0% of Sears shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for The Bon-Ton Stores and Sears, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Bon-Ton Stores 0 0 0 0 N/A
Sears 2 0 0 0 1.00

Sears has a consensus price target of $3.00, suggesting a potential downside of 20.63%. Given Sears’ higher probable upside, analysts plainly believe Sears is more favorable than The Bon-Ton Stores.

Profitability

This table compares The Bon-Ton Stores and Sears’ 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 -4.98%
Sears -6.38% N/A -8.87%

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.

About Sears

Sears Holdings Corporation is an integrated retailer. The Company is the parent company of Kmart Holding Corporation (Kmart) and Sears, Roebuck and Co. (Sears). The Company’s segments are Kmart and Sears Domestic. It also offers Shop Your Way, a member-based social shopping platform that offers rewards and personalized services. The Company is the home appliance retailer, as well as offers tools, lawn and garden, fitness equipment, automotive repair and maintenance. Its brands include Kenmore, Craftsman and DieHard. It also maintains a range of apparel and home offering, including labels, such as Jaclyn Smith, Joe Boxer, Route 66, Cannon, Ty Pennington Style and Levi’s and also offers Lands’ End merchandise in some of its Full-line stores. As of January 28, 2017, it is also a provider of home services, with over four million service and installation calls made annually. As of January 28, 2017, it operated a network of stores with 1,430 full-line and specialty retail stores.

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