Critical Analysis: GOME ELECTRICAL/ADR (GMELY) and Best Buy (BBY)

GOME ELECTRICAL/ADR (OTCMKTS:GMELY) 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 risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and price targets for GOME ELECTRICAL/ADR and Best Buy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GOME ELECTRICAL/ADR 0 0 0 0 N/A
Best Buy 1 11 4 0 2.19

Best Buy has a consensus target price of $76.60, indicating a potential upside of 20.52%. Given Best Buy’s higher probable upside, analysts clearly believe Best Buy is more favorable than GOME ELECTRICAL/ADR.

Dividends

Best Buy pays an annual dividend of $1.80 per share and has a dividend yield of 2.8%. GOME ELECTRICAL/ADR 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.

Profitability

This table compares GOME ELECTRICAL/ADR and Best Buy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GOME ELECTRICAL/ADR N/A N/A N/A
Best Buy 2.52% 44.41% 11.27%

Earnings and Valuation

This table compares GOME ELECTRICAL/ADR and Best Buy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GOME ELECTRICAL/ADR $10.59 billion 0.20 -$66.58 million N/A N/A
Best Buy $42.15 billion 0.41 $1.00 billion $4.42 14.40

Best Buy has higher revenue and earnings than GOME ELECTRICAL/ADR.

Insider & Institutional Ownership

84.9% of Best Buy shares are owned by institutional investors. 0.8% of Best Buy shares are owned 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.

Risk and Volatility

GOME ELECTRICAL/ADR has a beta of 0.73, meaning that its stock price is 27% less 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.

Summary

Best Buy beats GOME ELECTRICAL/ADR on 13 of the 14 factors compared between the two stocks.

About GOME ELECTRICAL/ADR

GOME Retail Holdings Limited, together with its subsidiaries, engages in the retail of home appliances and consumer electronic products in the People's Republic of China. The company is also involved in the provision of logistics and procurement, storage and delivery, IT development, and business management services; retailing of mobile phones and accessories; and online retail of electrical appliances and consumer electronic products, as well as in property holding activities. In addition, it engages in the trading of wine products. The company also sells its products through Internet retail platforms. As of December 31, 2017, it operated 1,604 stores in 425 cities. The company was formerly known as GOME Electrical Appliances Holding Limited and changed its name to GOME Retail Holdings Limited in August 2017. GOME Retail Holdings Limited was founded in 1987 and is headquartered in Central, Hong Kong.

About Best Buy

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.

Receive News & Ratings for GOME ELECTRICAL/ADR Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for GOME ELECTRICAL/ADR and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply