Critical Contrast: hhgregg (HGGGQ) and Best Buy (BBY)

hhgregg (OTCMKTS:HGGGQ) and Best Buy (NYSE:BBY) 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.

Dividends

Best Buy pays an annual dividend of $1.80 per share and has a dividend yield of 2.7%. hhgregg does not pay a dividend. Best Buy pays out 40.7% of its earnings in the form of a dividend. Best Buy has increased its dividend for 6 consecutive years.

Valuation & Earnings

This table compares hhgregg and Best Buy’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
hhgregg $1.96 billion 0.00 -$54.87 million N/A N/A
Best Buy $42.15 billion 0.44 $1.00 billion $4.42 15.14

Best Buy has higher revenue and earnings than hhgregg.

Institutional & Insider Ownership

85.2% of Best Buy shares are held by institutional investors. 53.1% of hhgregg shares are held by company insiders. Comparatively, 0.8% of Best Buy 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.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for hhgregg and Best Buy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
hhgregg 0 0 0 0 N/A
Best Buy 2 11 4 0 2.12

Best Buy has a consensus price target of $78.93, suggesting a potential upside of 17.13%. Given Best Buy’s higher possible upside, analysts plainly believe Best Buy is more favorable than hhgregg.

Risk and Volatility

hhgregg has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, Best Buy has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Profitability

This table compares hhgregg and Best Buy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
hhgregg N/A N/A N/A
Best Buy 2.44% 40.28% 11.15%

Summary

Best Buy beats hhgregg on 11 of the 14 factors compared between the two stocks.

hhgregg Company Profile

hhgregg, Inc. operates as an appliance, consumer electronics, and furniture retailer. The company's appliances products include refrigerators, cooking ranges, dishwashers, freezers, washers and dryers, grills, air conditioners, and small home appliances; consumer electronics products comprise LED televisions, audio systems, cameras, and Blu-ray players; furniture, mattresses, and other home products; and computers, computer accessories, and tablets. As of March 2, 2017, it operated 220 stores in 19 states of the United States. The company was founded in 1955 and is headquartered in Indianapolis, Indiana. On March 6, 2017, hhgregg, Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the US Bankruptcy Court for the Southern District of Indiana.

Best Buy Company Profile

Best Buy Co., Inc. operates as a retailer of technology products, services, and solutions in the United States, Canada, and Mexico. The company operates in two segments, Domestic and International. Its stores provide consumer electronics, including digital imaging, health and fitness, home automation, home theater, and portable audio products; computing and mobile phones, such as computing and peripherals, networking products, tablets, smart watches, and e-readers, as well as mobile phones comprising related mobile network carrier commissions; and entertainment products, including drones, movies, music, and technology toys, as well as gaming hardware and software, and virtual reality and other software products. The company's stores also offer appliances, which comprise dishwashers, laundry appliances, ovens, refrigerators, blenders, coffee makers, etc.; and other products, such as beverages, snacks, and sundry items, as well as baby products, luggage, and sporting goods. In addition, it provides services comprising consultation, design, delivery, installation, set-up, protection plan, repair, technical support, and educational services. The company offers its products through stores and Websites under the Best Buy, bestbuy.com, Best Buy Mobile, Best Buy Direct, Best Buy Express, Geek Squad, Magnolia Home Theater, Pacific Kitchen and Home, bestbuy.ca, and bestbuy.com.mx brand names, as well as through mobile applications and call centers. It has approximately 1,200 large-format and 300 small-format stores. The company was formerly known as Sound of Music, Inc. Best Buy Co., Inc. was founded in 1966 and is headquartered in Richfield, Minnesota.

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