Critical Contrast: At Home Group (HOME) and Williams-Sonoma (WSM)

At Home Group (NYSE: HOME) and Williams-Sonoma (NYSE:WSM) are both retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.

Profitability

This table compares At Home Group and Williams-Sonoma’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
At Home Group 4.18% 7.53% 3.21%
Williams-Sonoma 5.94% 25.45% 12.35%

Valuation and Earnings

This table compares At Home Group and Williams-Sonoma’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
At Home Group $765.64 million 1.95 $27.06 million $0.60 41.17
Williams-Sonoma $5.08 billion 0.89 $305.38 million $3.53 15.14

Williams-Sonoma has higher revenue and earnings than At Home Group. Williams-Sonoma is trading at a lower price-to-earnings ratio than At Home Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for At Home Group and Williams-Sonoma, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
At Home Group 0 2 5 0 2.71
Williams-Sonoma 5 15 3 0 1.91

At Home Group presently has a consensus price target of $27.50, suggesting a potential upside of 11.34%. Williams-Sonoma has a consensus price target of $50.78, suggesting a potential downside of 4.98%. Given At Home Group’s stronger consensus rating and higher possible upside, equities analysts plainly believe At Home Group is more favorable than Williams-Sonoma.

Institutional & Insider Ownership

24.8% of At Home Group shares are held by institutional investors. Comparatively, 96.6% of Williams-Sonoma shares are held by institutional investors. 7.1% of At Home Group shares are held by company insiders. Comparatively, 1.0% of Williams-Sonoma shares are held 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.

Dividends

Williams-Sonoma pays an annual dividend of $1.56 per share and has a dividend yield of 2.9%. At Home Group does not pay a dividend. Williams-Sonoma pays out 44.2% of its earnings in the form of a dividend. At Home Group has increased its dividend for 7 consecutive years.

Risk and Volatility

At Home Group has a beta of 3.84, meaning that its stock price is 284% more volatile than the S&P 500. Comparatively, Williams-Sonoma has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.

Summary

At Home Group beats Williams-Sonoma on 9 of the 17 factors compared between the two stocks.

At Home Group Company Profile

At Home Group, Inc. is a home decor superstore. The Company is focused on providing a range of assortment of products for any room, in any style, for any budget. As of July 30, 2016, the Company offered over 50,000 stock keeping units (SKUs) throughout its stores. As of July 30, 2016, the Company’s store base is consisted of 115 format stores across 29 states and 65 markets, averaging approximately 120,000 square feet per store.

Williams-Sonoma Company Profile

Williams-Sonoma, Inc. is a multi-channel specialty retailer of products for the home. The Company operates retail stores in the United States, Canada, Puerto Rico, Australia and the United Kingdom. It operates through two segments: e-commerce and retail. The e-commerce segment has various merchandising strategies, such as Williams-Sonoma, Pottery Barn, Pottery Barn Kids, West Elm, PBteen, Williams-Sonoma Home, Rejuvenation and Mark and Graham, which sell its products through the Company’s e-commerce Websites and direct-mail catalogs. The retail segment has various merchandising strategies, such as Williams-Sonoma, Pottery Barn, Pottery Barn Kids, West Elm and Rejuvenation, which sell its products through the Company’s retail stores. The Company franchises its brands to third parties in a number of countries in the Middle East, the Philippines and Mexico. The Company’s products are also available to customers through its catalogs and online across the world.

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