Head-To-Head Survey: Big Lots (BIG) vs. Walmart (WMT)

Big Lots (NYSE: BIG) and Walmart (NYSE:WMT) are both retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, risk, profitability, institutional ownership and earnings.

Volatility & Risk

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Big Lots has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500. Comparatively, Walmart has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500.

Profitability

This table compares Big Lots and Walmart’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Big Lots 3.60% 31.12% 11.51%
Walmart 1.97% 16.85% 6.51%

Institutional & Insider Ownership

30.0% of Walmart shares are owned by institutional investors. 1.7% of Big Lots shares are owned by company insiders. Comparatively, 51.4% of Walmart shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Big Lots and Walmart, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Big Lots 0 6 6 0 2.50
Walmart 0 17 13 0 2.43

Big Lots presently has a consensus price target of $57.91, suggesting a potential upside of 34.48%. Walmart has a consensus price target of $101.12, suggesting a potential upside of 16.64%. Given Big Lots’ stronger consensus rating and higher possible upside, research analysts clearly believe Big Lots is more favorable than Walmart.

Valuation and Earnings

This table compares Big Lots and Walmart’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Big Lots $5.27 billion 0.34 $189.83 million $4.45 9.68
Walmart $500.34 billion 0.51 $9.86 billion $4.42 19.61

Walmart has higher revenue and earnings than Big Lots. Big Lots is trading at a lower price-to-earnings ratio than Walmart, indicating that it is currently the more affordable of the two stocks.

Dividends

Big Lots pays an annual dividend of $1.20 per share and has a dividend yield of 2.8%. Walmart pays an annual dividend of $2.08 per share and has a dividend yield of 2.4%. Big Lots pays out 27.0% of its earnings in the form of a dividend. Walmart pays out 47.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Big Lots has raised its dividend for 3 consecutive years and Walmart has raised its dividend for 43 consecutive years. Big Lots is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Big Lots beats Walmart on 9 of the 17 factors compared between the two stocks.

Big Lots Company Profile

Big Lots, Inc., through its subsidiaries, operates as a non-traditional, discount retailer in the United States. The company offers products under various merchandising categories, such as food category that includes beverage and grocery, candy and snacks, and specialty foods departments; consumables category, which comprises health and beauty, plastics, paper, chemical, and pet departments; soft home category that consists of home d├ęcor, frames, fashion bedding, utility bedding, bath, window, decorative textile, and area rugs departments; hard home category, including small appliances, table top, food preparation, stationery, greeting cards, and home maintenance departments; and furniture category consisting of upholstery, mattress, ready-to-assemble, and case goods departments. It also provides merchandise under the seasonal category that includes lawn and garden, summer, Christmas, and other holiday departments; and electronics, toys, and accessories category, including electronics, jewelry, hosiery, toys, and infant accessories departments. As of November 7, 2017, it operated 1,428 stores in 47 states. Big Lots, Inc. was founded in 1967 and is headquartered in Columbus, Ohio.

Walmart Company Profile

Walmart Inc., formerly Wal-Mart Stores, Inc., is engaged in the operation of retail, wholesale and other units in various formats around the world. The Company offers an assortment of merchandise and services at everyday low prices (EDLP). The Company operates through three segments: Walmart U.S., Walmart International and Sam’s Club. The Walmart U.S. segment includes the Company’s mass merchant concept in the United States operating under the Walmart brands, as well as digital retail. The Walmart International segment consists of the Company’s operations outside of the United States, including various retail Websites. The Sam’s Club segment includes the warehouse membership clubs in the United States, as well as samsclub.com. The Company operates approximately 11,600 stores under 59 banners in 28 countries and e-commerce Websites in 11 countries.

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