Tiffany & Co. (NYSE:TIF) and DICK'S Sporting Goods (NYSE:DKS) are both 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.
Volatility and Risk
Tiffany & Co. has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, DICK'S Sporting Goods has a beta of 1.62, indicating that its stock price is 62% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Tiffany & Co. and DICK'S Sporting Goods, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Tiffany & Co. | 0 | 7 | 0 | 0 | 2.00 |
| DICK'S Sporting Goods | 2 | 12 | 10 | 0 | 2.33 |
Tiffany & Co. presently has a consensus price target of $127.3750, suggesting a potential downside of 3.11%. DICK'S Sporting Goods has a consensus price target of $56.00, suggesting a potential downside of 17.79%. Given Tiffany & Co.'s higher probable upside, equities analysts plainly believe Tiffany & Co. is more favorable than DICK'S Sporting Goods.
Dividends
Tiffany & Co. pays an annual dividend of $2.32 per share and has a dividend yield of 1.8%. DICK'S Sporting Goods pays an annual dividend of $1.25 per share and has a dividend yield of 1.8%. Tiffany & Co. pays out 50.5% of its earnings in the form of a dividend. DICK'S Sporting Goods pays out 33.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. DICK'S Sporting Goods is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Tiffany & Co. and DICK'S Sporting Goods' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Tiffany & Co. | 6.72% | 8.43% | 4.09% |
| DICK'S Sporting Goods | 4.20% | 25.52% | 6.49% |
Institutional & Insider Ownership
77.8% of Tiffany & Co. shares are held by institutional investors. Comparatively, 76.5% of DICK'S Sporting Goods shares are held by institutional investors. 0.7% of Tiffany & Co. shares are held by company insiders. Comparatively, 30.6% of DICK'S Sporting Goods shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Tiffany & Co. and DICK'S Sporting Goods' revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Tiffany & Co. | $4.42 billion | 3.61 | $541.10 million | $4.59 | 28.64 |
| DICK'S Sporting Goods | $8.75 billion | 0.70 | $297.46 million | $3.69 | 18.46 |
Tiffany & Co. has higher earnings, but lower revenue than DICK'S Sporting Goods. DICK'S Sporting Goods is trading at a lower price-to-earnings ratio than Tiffany & Co., indicating that it is currently the more affordable of the two stocks.
Summary
DICK'S Sporting Goods beats Tiffany & Co. on 9 of the 16 factors compared between the two stocks.
