Analyzing Dicks Sporting Goods (DKS) and Barnes & Noble Education (BNED)

Dicks Sporting Goods (NYSE: DKS) and Barnes & Noble Education (NYSE:BNED) are both retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, risk, earnings, profitability, valuation, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

71.3% of Dicks Sporting Goods shares are owned by institutional investors. Comparatively, 69.2% of Barnes & Noble Education shares are owned by institutional investors. 23.1% of Dicks Sporting Goods shares are owned by company insiders. Comparatively, 3.5% of Barnes & Noble Education shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Dicks Sporting Goods and Barnes & Noble Education’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dicks Sporting Goods 3.77% 16.86% 7.32%
Barnes & Noble Education -12.31% -41.88% -18.50%

Volatility & Risk

Dicks Sporting Goods has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, Barnes & Noble Education has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500.

Dividends

Dicks Sporting Goods pays an annual dividend of $0.90 per share and has a dividend yield of 2.8%. Barnes & Noble Education does not pay a dividend. Dicks Sporting Goods pays out 29.9% of its earnings in the form of a dividend. Dicks Sporting Goods has raised its dividend for 3 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Dicks Sporting Goods and Barnes & Noble Education, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dicks Sporting Goods 2 15 13 0 2.37
Barnes & Noble Education 0 0 2 0 3.00

Dicks Sporting Goods currently has a consensus target price of $34.80, suggesting a potential upside of 9.92%. Barnes & Noble Education has a consensus target price of $12.00, suggesting a potential upside of 62.82%. Given Barnes & Noble Education’s stronger consensus rating and higher possible upside, analysts clearly believe Barnes & Noble Education is more favorable than Dicks Sporting Goods.

Earnings & Valuation

This table compares Dicks Sporting Goods and Barnes & Noble Education’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dicks Sporting Goods $8.59 billion 0.40 $323.44 million $3.01 10.52
Barnes & Noble Education $1.87 billion 0.18 $5.36 million $0.11 67.00

Dicks Sporting Goods has higher revenue and earnings than Barnes & Noble Education. Dicks Sporting Goods is trading at a lower price-to-earnings ratio than Barnes & Noble Education, indicating that it is currently the more affordable of the two stocks.

Summary

Dicks Sporting Goods beats Barnes & Noble Education on 13 of the 16 factors compared between the two stocks.

About Dicks Sporting Goods

Dick's Sporting Goods, Inc. operates as a sporting goods retailer primarily in the eastern United States. It provides hardlines, including sporting goods equipment, fitness equipment, golf equipment, and hunting and fishing gear products; apparel; and footwear products and accessories. The company also owns and operates Golf Galaxy, Field & Stream and other specialty concept stores; and e-commerce Websites, as well as Dick's Team Sports HQ, a youth sports digital platform that offers free league management services, mobile apps for scheduling, communications and live scorekeeping, custom uniforms and fan wear, and access to donations and sponsorships. As of October 28, 2017, it operated approximately 715 DICK'S Sporting Goods locations in the United States. The company was formerly known as Dick's Clothing and Sporting Goods, Inc. and changed its name to Dick's Sporting Goods, Inc. in April 1999. Dick's Sporting Goods, Inc. was founded in 1948 and is headquartered in Coraopolis, Pennsylvania.

About Barnes & Noble Education

Barnes & Noble Education, Inc. operates bookstores for college and university campuses, and private/parochial K-12 schools in the United States. The company operates in two segments, Barnes & Noble College and MBS Textbook Exchange. The Barnes & Noble College segment sells and rents course material; offers a suite of digital content, software, and services through its LoudCloud platform, as well as etextbooks; and sells general merchandise, including collegiate and athletic apparel, other custom-branded school spirit products, technology, supplies, and convenience items. It also operates 83 customized caf├ęs and 17 stand-alone convenience stores; and a media channel for brands targeting the college demographic. As of April 29, 2017, this segment operated 769 physical bookstores; and 61 True Spirit sites. The MBS Textbook Exchange segment is involved in the operation of virtual bookstores, which offer course materials, including new and used print and digital textbooks; and textbook distribution activities, as well as sale of inventory management, hardware, and point-of-sale software. It also provides digital suite of course materials and platforms; new, used, and digital textbooks online; and digital content. This segment operates 712 virtual bookstores, including 454 virtual stores at K-12 schools; and textbooks.com. Barnes & Noble Education, Inc. was founded in 1873 and is based in Basking Ridge, New Jersey.

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