Financial Contrast: Five Below (NASDAQ:FIVE) vs. Floor & Decor (NYSE:FND)

Five Below (NASDAQ:FIVE) and Floor & Decor (NYSE:FND) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, dividends, valuation, profitability, institutional ownership, earnings and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings and target prices for Five Below and Floor & Decor, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Five Below	0	12	19	1	2.66
Floor & Decor	3	13	5	0	2.10

Five Below currently has a consensus price target of $300.20, suggesting a potential upside of 34.14%. Floor & Decor has a consensus price target of $57.65, suggesting a potential upside of 27.49%. Given Five Below’s stronger consensus rating and higher possible upside, equities analysts clearly believe Five Below is more favorable than Floor & Decor.

Profitability

This table compares Five Below and Floor & Decor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Five Below	11.65%	22.13%	9.86%
Floor & Decor	4.93%	8.20%	3.58%

Valuation & Earnings

This table compares Five Below and Floor & Decor”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Five Below	$4.76 billion	2.59	$358.64 million	$11.14	20.09
Floor & Decor	$4.68 billion	1.03	$208.65 million	$2.15	21.03

Five Below has higher revenue and earnings than Floor & Decor. Five Below is trading at a lower price-to-earnings ratio than Floor & Decor, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Five Below has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500. Comparatively, Floor & Decor has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500.

Summary

Five Below beats Floor & Decor on 11 of the 13 factors compared between the two stocks.

About Five Below

Five Below, Inc. operates as a specialty value retailer in the United States. The company offers range of accessories, which includes novelty socks, sunglasses, jewelry, scarves, gloves, hair accessories, athletic tops and bottoms, and t-shirts, as well as nail polish, lip gloss, fragrance, and branded cosmetics; and personalized living space products, such as lamps, posters, frames, fleece blankets, plush items, pillows, candles, incense, lighting, novelty décor, accent furniture, and related items, as well as provides storage options. It provides assortment of sports balls, team sports merchandise, and fitness accessories comprising hand weights, jump ropes, and gym balls; various games, such as board games, puzzles, collectibles, and toys, including remote control; and summer season sports, which includes pool, beach, and outdoor toys, as well as games and accessories. In addition, the company offers accessories for cell phones, tablets, audio, and computers, as well as cases, chargers, headphones, and other related items; and media products including books, video games, and DVDs. It also provides assortment of craft activity kits, and arts and crafts supplies, such as crayons, markers, and stickers; and school products comprising backpacks, fashion notebooks and journals, novelty pens and pencils, and locker accessories. Further, the company offers party products, which includes party goods, decorations, gag gifts, and greeting cards, as well as every day and special occasion merchandise; assortment of classic and novelty candy bars, movie-size box candy, seasonal-related candy, and gum and snack food products, as well as sells chilled drinks through coolers; and provides seasonally specific items used to celebrate and decorate for events. The company was formerly known as Cheap Holdings, Inc. and changed its name to Five Below, Inc. in August 2002. Five Below, Inc. was incorporated in 2002 and is headquartered in Philadelphia, Pennsylvania.

About Floor & Decor

Floor & Decor Holdings, Inc. engages in the retail of hard surface flooring and related accessories. It provides wood, stone, and flooring products. Its products include vinyl, laminate, and tiles with materials installation for living rooms, kitchen, bathrooms, and walls. The company was founded by George Vincent West in 2000 and is headquartered in Atlanta, GA.