Barnes & Noble Education (NYSE: BNED) and Office Depot (NASDAQ:ODP) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.
Institutional and Insider Ownership
69.2% of Barnes & Noble Education shares are held by institutional investors. Comparatively, 92.8% of Office Depot shares are held by institutional investors. 3.5% of Barnes & Noble Education shares are held by insiders. Comparatively, 2.2% of Office Depot shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Office Depot pays an annual dividend of $0.10 per share and has a dividend yield of 4.9%. Barnes & Noble Education does not pay a dividend. Office Depot pays out 22.2% of its earnings in the form of a dividend.
This table compares Barnes & Noble Education and Office Depot’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Barnes & Noble Education||-12.31%||-41.88%||-18.50%|
Volatility and Risk
Barnes & Noble Education has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500. Comparatively, Office Depot has a beta of 2.67, meaning that its share price is 167% more volatile than the S&P 500.
Earnings and Valuation
This table compares Barnes & Noble Education and Office Depot’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Barnes & Noble Education||$1.87 billion||0.17||$5.36 million||$0.11||63.18|
|Office Depot||$10.24 billion||0.11||$181.00 million||$0.45||4.51|
Office Depot has higher revenue and earnings than Barnes & Noble Education. Office Depot is trading at a lower price-to-earnings ratio than Barnes & Noble Education, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and price targets for Barnes & Noble Education and Office Depot, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Barnes & Noble Education||0||0||2||0||3.00|
Barnes & Noble Education currently has a consensus price target of $12.00, suggesting a potential upside of 72.66%. Office Depot has a consensus price target of $5.08, suggesting a potential upside of 150.25%. Given Office Depot’s higher probable upside, analysts plainly believe Office Depot is more favorable than Barnes & Noble Education.
Office Depot beats Barnes & Noble Education on 10 of the 16 factors compared between the two stocks.
About Barnes & Noble Education
Barnes & Noble Education, Inc. operates bookstores for college and university campuses, and private/parochial K-12 schools in the United States. The company operates in two segments, Barnes & Noble College and MBS Textbook Exchange. The Barnes & Noble College segment sells and rents course material; offers a suite of digital content, software, and services through its LoudCloud platform, as well as etextbooks; and sells general merchandise, including collegiate and athletic apparel, other custom-branded school spirit products, technology, supplies, and convenience items. It also operates 83 customized cafés and 17 stand-alone convenience stores; and a media channel for brands targeting the college demographic. As of April 29, 2017, this segment operated 769 physical bookstores; and 61 True Spirit sites. The MBS Textbook Exchange segment is involved in the operation of virtual bookstores, which offer course materials, including new and used print and digital textbooks; and textbook distribution activities, as well as sale of inventory management, hardware, and point-of-sale software. It also provides digital suite of course materials and platforms; new, used, and digital textbooks online; and digital content. This segment operates 712 virtual bookstores, including 454 virtual stores at K-12 schools; and textbooks.com. Barnes & Noble Education, Inc. was founded in 1873 and is based in Basking Ridge, New Jersey.
About Office Depot
Office Depot, Inc., together with its subsidiaries, provides various products and services. It operates in three divisions: Retail, Business Solutions, and CompuCom. The Retail division operates retail stores, which offer office supplies; technology products and solutions; business machines and related supplies; print, cleaning, breakroom, and facilities products; and office furniture in the United States, Puerto Rico, and the U.S. Virgin Islands. Its stores also provide printing, reproduction, mailing, and shipping services. As of December 31, 2017, this division operated 1,378 office supply stores. The Business Solutions division sells office supply products and services through sales forces, catalogs, and telesales, as well as through Internet sites in the United States, Puerto Rico, U.S. Virgin Islands, and Canada. The CompuCom division sells information technology (IT) outsourcing services and products in the United States, Canada, and Costa Rica. It offers a range of solutions, including end user computing (tablets, smartphones, laptops, and desktops), data center management, service desk, network infrastructure, and IT workforce solutions. This division serves its customers through IT service and sales representatives and telesales, as well as Internet sites. The company offers its products under various labels, including Office Depot, OfficeMax, Foray, Ativa, TUL, Realspace, WorkPro, Brenton Studio, Highmark, and Grand & Toy. Office Depot, Inc. was founded in 1986 and is headquartered in Boca Raton, Florida.
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