J C Penney (NYSE: JCP) and Kohl’s (NYSE:KSS) are both retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, earnings, institutional ownership, profitability and dividends.
Volatility and Risk
J C Penney has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Kohl’s has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500.
This table compares J C Penney and Kohl’s’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|J C Penney||-0.93%||5.65%||0.80%|
Valuation & Earnings
This table compares J C Penney and Kohl’s’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|J C Penney||$12.51 billion||0.07||-$116.00 million||$0.22||13.59|
|Kohl’s||$19.10 billion||0.52||$859.00 million||$4.19||14.20|
Kohl’s has higher revenue and earnings than J C Penney. J C Penney is trading at a lower price-to-earnings ratio than Kohl’s, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
74.5% of J C Penney shares are held by institutional investors. 1.5% of J C Penney shares are held by insiders. Comparatively, 1.2% of Kohl’s shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Kohl’s pays an annual dividend of $2.44 per share and has a dividend yield of 4.1%. J C Penney does not pay a dividend. Kohl’s pays out 58.2% of its earnings in the form of a dividend. Kohl’s has raised its dividend for 7 consecutive years.
This is a breakdown of current recommendations for J C Penney and Kohl’s, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|J C Penney||2||17||0||0||1.89|
J C Penney presently has a consensus target price of $4.18, indicating a potential upside of 39.44%. Kohl’s has a consensus target price of $60.53, indicating a potential upside of 1.72%. Given J C Penney’s higher probable upside, research analysts clearly believe J C Penney is more favorable than Kohl’s.
Kohl’s beats J C Penney on 13 of the 17 factors compared between the two stocks.
J C Penney Company Profile
J. C. Penney Company, Inc. is a holding company. The Company’s business consists of selling merchandise and services to consumers through its department stores and its Website at jcpenney.com. Its department stores and Website generally serve the same type of customers, its Website offers virtually the same mix of merchandise as its store assortment and other categories, and its department stores generally accept returns from sales made in stores and through its Website. It fulfills online customer purchases by direct shipment to the customer from its distribution facilities and stores or from its suppliers’ warehouses and by in store customer pick up. The Company sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products through Sephora inside JCPenney, home furnishings and appliances. In addition, its department stores provide its customers with services, such as styling salon, optical, portrait photography and custom decorating.
Kohl’s Company Profile
Kohl's Corporation operates department stores in the United States. It offers private label, exclusive, and national brand apparel, footwear, accessories, beauty, and home products to children, men, and women customers. The company also sells its products online through Website Kohls.com. As of January 28, 2017, it operated 1,154 department stores, 12 FILA outlets, and 3 Off-Aisle clearance centers. Kohl's Corporation was founded in 1962 and is headquartered in Menomonee Falls, Wisconsin.
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