Ross Stores (NASDAQ: ROST) and Francesca's (NASDAQ:FRAN) are both retail/wholesale companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, dividends, valuation and profitability.
This table compares Ross Stores and Francesca's’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Ross Stores pays an annual dividend of $0.64 per share and has a dividend yield of 0.8%. Francesca's does not pay a dividend. Ross Stores pays out 20.4% of its earnings in the form of a dividend. Ross Stores has raised its dividend for 11 consecutive years.
This is a breakdown of recent ratings and recommmendations for Ross Stores and Francesca's, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Ross Stores currently has a consensus price target of $74.53, suggesting a potential downside of 10.83%. Francesca's has a consensus price target of $10.67, suggesting a potential upside of 83.28%. Given Francesca's’ higher probable upside, analysts clearly believe Francesca's is more favorable than Ross Stores.
Institutional and Insider Ownership
91.4% of Ross Stores shares are owned by institutional investors. 2.3% of Ross Stores shares are owned by company insiders. Comparatively, 1.2% of Francesca's shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Volatility and Risk
Ross Stores has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, Francesca's has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500.
Earnings and Valuation
This table compares Ross Stores and Francesca's’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Ross Stores||$12.87 billion||2.48||$1.12 billion||$3.13||26.70|
|Francesca's||$487.19 million||0.43||$42.00 million||$0.72||8.08|
Ross Stores has higher revenue and earnings than Francesca's. Francesca's is trading at a lower price-to-earnings ratio than Ross Stores, indicating that it is currently the more affordable of the two stocks.
Ross Stores beats Francesca's on 15 of the 17 factors compared between the two stocks.
About Ross Stores
Ross Stores, Inc. and its subsidiaries operate two brands of off-price retail apparel and home fashion stores-Ross Dress for Less (Ross) and dd’s DISCOUNTS. The Company is the off-price apparel and home fashion chain in the United States, with 1,340 locations in 36 states, the District of Columbia and Guam, as of January 28, 2017. The Company offers in-season, name brand and designer apparel, accessories, footwear, and home fashions for the entire family at savings of 20% to 60% off department and specialty store regular prices every day. The Company also operated 193 dd’s DISCOUNTS stores in 15 states as of January 28, 2017. As of January 28, 2017, the Company operated a total of 1,533 stores consisted of 1,340 Ross stores and 193 dd’s DISCOUNTS stores. As of January 28, 2017, the Company owned and operated six distribution processing facilities-three in California, one in Pennsylvania, and two in South Carolina.
Francesca’s Holdings Corporation is a holding company. The Company is a specialty retailer, which operates a chain of boutiques across the United States. The Company offers a mix of apparel, jewelry, accessories and gifts. As of January 28, 2017, the Company operated 671 boutiques in 48 states and the District of Columbia, and also served its customers through www.francescas.com, its e-commerce Website. The Company offers apparel, such as dresses, fashion tops, sweaters, cardigans and wraps, bottoms, outerwear and jackets, tees and tanks, and intimates. The Company provides jewelry, such as necklaces, earrings, bracelets and rings. The Company offers accessories, such as handbags, clutches, wallets, shoes, belts, hats, scarves, sunglasses, watches and hair accessories. The Company provides gifts, such as fragrance, candles, bath and body, home accessories, books, wall art, nail polish and miscellaneous items. The Company operates its boutiques under the francesca’s brand.
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