Sears (NASDAQ: SHLD) and Hibbett Sports (NASDAQ:HIBB) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.
Volatility and Risk
Sears has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, Hibbett Sports has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.
This is a summary of current ratings and price targets for Sears and Hibbett Sports, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Sears currently has a consensus price target of $2.50, indicating a potential upside of 8.23%. Hibbett Sports has a consensus price target of $21.58, indicating a potential upside of 0.12%. Given Sears’ higher probable upside, research analysts clearly believe Sears is more favorable than Hibbett Sports.
This table compares Sears and Hibbett Sports’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
58.2% of Sears shares are owned by institutional investors. 89.0% of Sears shares are owned by insiders. Comparatively, 1.6% of Hibbett Sports shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares Sears and Hibbett Sports’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Sears||$16.70 billion||0.01||-$383.00 million||($3.56)||-0.65|
|Hibbett Sports||$968.22 million||0.46||$35.03 million||$1.70||12.68|
Hibbett Sports has lower revenue, but higher earnings than Sears. Sears is trading at a lower price-to-earnings ratio than Hibbett Sports, indicating that it is currently the more affordable of the two stocks.
Hibbett Sports beats Sears on 9 of the 14 factors compared between the two stocks.
Sears Holdings Corporation operates as an integrated retailer in the United States. It operates in two segments, Kmart and Sears Domestic. The Kmart segment operates retail stores that offer a range of products, including consumer electronics, seasonal merchandise, outdoor living, toys, lawn and garden equipment, food and consumables, and apparel; and in-store pharmacies. It provides merchandise under the Jaclyn Smith, Craftsman, and Joe Boxer labels; Sears brand products, such as Kenmore and DieHard; and Kenmore-branded products. As of January 28, 2017, this segment operated approximately 735 Kmart stores. The Sears Domestic segment operates stores that provide appliances, consumer electronics/connected solutions, tools, sporting goods, outdoor living, lawn and garden equipment, apparel, footwear, jewelry, and accessories, as well as automotive services and products, such as tires, batteries, and home fashion products. It also offers merchandise, and parts and services to commercial customers; parts and repair services for appliances, lawn and garden equipment, consumer electronics, floor care products, and heating and cooling systems; home improvement services, such as siding, windows, cabinet refacing, kitchen remodeling, roofing, carpet and upholstery cleaning, air duct cleaning, and garage door installation and repair; and protection agreements and product installation services. This segment provides merchandise under the Kenmore, DieHard, Bongo, Covington, Canyon River Blues, Simply Styled, Everlast, Metaphor, Roebuck & Co., Outdoor Life, and Structure brands, as well as under the Roadhandler, Levi's, Craftsman, and WallyHome brands. As of January 28, 2017, this segment operated 670 full-line stores and 25 specialty stores. Sears Holdings Corporation was founded in 1899 and is based in Hoffman Estates, Illinois.
About Hibbett Sports
Hibbett Sports, Inc. operates athletic specialty stores in small and mid-sized markets in the South, Southwest, Mid-Atlantic and the Midwest regions of the United States. As of January 28, 2017, the Company had operated 1,078 stores consisting of 1,059 Hibbett Sports stores and 19 smaller-format Sports Additions athletic shoe stores in 35 states. Its primary retail format is Hibbett Sports, which is an approximately 5,000 square foot store. Hibbett Sports stores offer a merchandising mix of localized apparel, footwear, equipment and accessories designed to appeal to a range of customers within each market. Its 19 Sports Additions stores are enclosed mall-based stores, averaging 2,500 square feet with approximately 90% of merchandise consisting of athletic footwear and the remainder consisting of caps and a limited assortment of apparel. Hibbett Team Sales, Inc., a subsidiary of the Company, is a supplier of customized athletic apparel, equipment and footwear.
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