Nordstrom (NYSE:JWN) and Restaurant Brands International (NYSE:QSR) are both retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, profitability, risk, analyst recommendations, institutional ownership, dividends and earnings.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Nordstrom and Restaurant Brands International, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Nordstrom | 4 | 9 | 2 | 0 | 1.87 |
Restaurant Brands International | 1 | 5 | 19 | 0 | 2.72 |
Nordstrom presently has a consensus target price of $30.50, indicating a potential downside of 18.38%. Restaurant Brands International has a consensus target price of $64.9091, indicating a potential upside of 8.04%. Given Restaurant Brands International's stronger consensus rating and higher probable upside, analysts plainly believe Restaurant Brands International is more favorable than Nordstrom.
Risk & Volatility
Nordstrom has a beta of 2.44, suggesting that its share price is 144% more volatile than the S&P 500. Comparatively, Restaurant Brands International has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.
Insider and Institutional Ownership
63.3% of Nordstrom shares are held by institutional investors. Comparatively, 79.5% of Restaurant Brands International shares are held by institutional investors. 5.5% of Nordstrom shares are held by insiders. Comparatively, 3.7% of Restaurant Brands International shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Valuation and Earnings
This table compares Nordstrom and Restaurant Brands International'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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Nordstrom | $15.52 billion | 0.38 | $496 million | $3.37 | 11.09 |
Restaurant Brands International | $5.60 billion | 3.26 | $643 million | $2.72 | 22.09 |
Restaurant Brands International has lower revenue, but higher earnings than Nordstrom. Nordstrom is trading at a lower price-to-earnings ratio than Restaurant Brands International, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Nordstrom and Restaurant Brands International's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Nordstrom | -4.57% | -77.24% | -3.56% |
Restaurant Brands International | 11.00% | 26.67% | 4.70% |
Summary
Restaurant Brands International beats Nordstrom on 10 of the 14 factors compared between the two stocks.