Dunkin' Brands Group (NASDAQ:DNKN) and GameStop (NYSE:GME) are both mid-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.
Insider & Institutional Ownership
82.0% of Dunkin' Brands Group shares are owned by institutional investors. 1.8% of Dunkin' Brands Group shares are owned by company insiders. Comparatively, 2.4% of GameStop shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Dunkin' Brands Group and GameStop, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Dunkin' Brands Group | 0 | 18 | 5 | 0 | 2.22 |
GameStop | 2 | 4 | 1 | 0 | 1.86 |
Dunkin' Brands Group presently has a consensus price target of $85.6190, suggesting a potential downside of 19.59%. GameStop has a consensus price target of $9.7857, suggesting a potential downside of 72.43%. Given Dunkin' Brands Group's stronger consensus rating and higher probable upside, equities analysts plainly believe Dunkin' Brands Group is more favorable than GameStop.
Volatility and Risk
Dunkin' Brands Group has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, GameStop has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500.
Valuation and Earnings
This table compares Dunkin' Brands Group and GameStop's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Dunkin' Brands Group | $1.37 billion | 6.40 | $242.02 million | $3.17 | 33.59 |
GameStop | $6.47 billion | 0.38 | $-470,900,000.00 | $0.22 | 161.36 |
Dunkin' Brands Group has higher earnings, but lower revenue than GameStop. Dunkin' Brands Group is trading at a lower price-to-earnings ratio than GameStop, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Dunkin' Brands Group and GameStop's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Dunkin' Brands Group | 16.84% | -39.92% | 6.03% |
GameStop | -5.32% | -33.58% | -5.66% |
Summary
Dunkin' Brands Group beats GameStop on 10 of the 14 factors compared between the two stocks.