Conn's (NASDAQ: CONN) and Best Buy (NYSE:BBY) are both retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, dividends, profitability and risk.
Best Buy pays an annual dividend of $1.80 per share and has a dividend yield of 2.6%. Conn's does not pay a dividend. Best Buy pays out 40.7% of its earnings in the form of a dividend. Best Buy has raised its dividend for 6 consecutive years.
This is a breakdown of recent recommendations and price targets for Conn's and Best Buy, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Conn's presently has a consensus price target of $37.80, indicating a potential upside of 11.18%. Best Buy has a consensus price target of $69.60, indicating a potential downside of 0.56%. Given Conn's’ stronger consensus rating and higher probable upside, equities analysts clearly believe Conn's is more favorable than Best Buy.
Risk & Volatility
Conn's has a beta of 1.79, indicating that its share price is 79% more volatile than the S&P 500. Comparatively, Best Buy has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500.
Valuation and Earnings
This table compares Conn's and Best Buy’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Conn's||$1.60 billion||0.67||-$25.56 million||($0.22)||-154.55|
|Best Buy||$42.15 billion||0.49||$1.00 billion||$4.42||15.83|
Best Buy has higher revenue and earnings than Conn's. Conn's is trading at a lower price-to-earnings ratio than Best Buy, indicating that it is currently the more affordable of the two stocks.
This table compares Conn's and Best Buy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
68.8% of Conn's shares are owned by institutional investors. Comparatively, 85.1% of Best Buy shares are owned by institutional investors. 3.5% of Conn's shares are owned by insiders. Comparatively, 1.2% of Best Buy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Best Buy beats Conn's on 10 of the 17 factors compared between the two stocks.
Conn's Company Profile
Conn’s, Inc. is a specialty retailer that offers a selection of consumer goods and related services in addition to a credit solution for its core credit constrained consumers. The Company operates through two segments: retail and credit. The Retail segment includes product categories, such as furniture and mattress, including furniture and related accessories for the living room, dining room and bedroom; home appliance, including refrigerators, freezers, washers, dryers, dishwashers and ranges; Consumer electronics, including liquid-crystal-display (LED), organic LED (OLED), Ultra high definition (HD) and Internet-ready televisions, and home office, including computers, printers and accessories. Its credit segment provides short- and medium-term financing for its retail customers. Its credit offering provides financing solutions to credit constrained consumers having limited banking options. The Company operates its business through its retail stores and Website.
Best Buy Company Profile
Best Buy Co., Inc. is a provider of technology products, services and solutions. The Company offers products and services to the customers visiting its stores, engaging with Geek Squad agents, or using its Websites or mobile applications. It has operations in the United States, Canada and Mexico. The Company operates through two segments: Domestic and International. The Domestic segment consists of the operations in all states, districts and territories of the United States, under various brand names, including Best Buy, bestbuy.com, Best Buy Mobile, Best Buy Direct, Best Buy Express, Geek Squad, Magnolia Home Theater, and Pacific Kitchen and Home. The International segment consists of all operations in Canada and Mexico under the brand names, Best Buy, bestbuy.com.ca, bestbuy.com.mx, Best Buy Express, Best Buy Mobile and Geek Squad. As of December 31, 2016, the Company operated 1,200 large-format and 400 small-format stores throughout its Domestic and International segments.
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