Ross Stores (NASDAQ: ROST) and Kate Spade & Co (NYSE:KATE) are both retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Risk and Volatility

Ross Stores has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, Kate Spade & Co has a beta of 1.75, suggesting that its stock price is 75% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Ross Stores and Kate Spade & Co, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ross Stores 0 7 13 0 2.65
Kate Spade & Co 1 13 1 0 2.00

Ross Stores currently has a consensus price target of $70.71, suggesting a potential upside of 11.37%. Kate Spade & Co has a consensus price target of $20.04, suggesting a potential upside of 8.39%. Given Ross Stores’ stronger consensus rating and higher possible upside, equities analysts plainly believe Ross Stores is more favorable than Kate Spade & Co.

Institutional and Insider Ownership

90.4% of Ross Stores shares are owned by institutional investors. Comparatively, 97.9% of Kate Spade & Co shares are owned by institutional investors. 2.3% of Ross Stores shares are owned by insiders. Comparatively, 0.8% of Kate Spade & Co shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Ross Stores and Kate Spade & Co’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ross Stores 8.87% 42.95% 21.77%
Kate Spade & Co 0.44% 1.11% 0.43%

Valuation and Earnings

This table compares Ross Stores and Kate Spade & Co’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ross Stores $13.33 billion 1.84 $2.19 billion $3.03 20.95
Kate Spade & Co N/A N/A N/A $1.11 16.66

Ross Stores has higher revenue and earnings than Kate Spade & Co. Kate Spade & Co is trading at a lower price-to-earnings ratio than Ross Stores, indicating that it is currently the more affordable of the two stocks.

Dividends

Ross Stores pays an annual dividend of $0.64 per share and has a dividend yield of 1.0%. Kate Spade & Co does not pay a dividend. Ross Stores pays out 21.1% of its earnings in the form of a dividend. Kate Spade & Co has raised its dividend for 10 consecutive years.

Summary

Ross Stores beats Kate Spade & Co on 10 of the 14 factors compared between the two stocks.

Ross Stores Company Profile

Ross Stores, Inc. and its subsidiaries operate two brands of off-price retail apparel and home fashion stores-Ross Dress for Less (Ross) and dd’s DISCOUNTS. The Company is the off-price apparel and home fashion chain in the United States, with 1,340 locations in 36 states, the District of Columbia and Guam, as of January 28, 2017. The Company offers in-season, name brand and designer apparel, accessories, footwear, and home fashions for the entire family at savings of 20% to 60% off department and specialty store regular prices every day. The Company also operated 193 dd’s DISCOUNTS stores in 15 states as of January 28, 2017. As of January 28, 2017, the Company operated a total of 1,533 stores consisted of 1,340 Ross stores and 193 dd’s DISCOUNTS stores. As of January 28, 2017, the Company owned and operated six distribution processing facilities-three in California, one in Pennsylvania, and two in South Carolina.

Kate Spade & Co Company Profile

Kate Spade & Company is engaged in the design and marketing of a range of accessories and apparel. It operates through three segments. The KATE SPADE North America segment consists of the Company’s kate spade new york and JACK SPADE brands in North America. The KATE SPADE International segment consists of the Company’s kate spade new york and JACK SPADE brands in international markets, which operates principally in Japan, Asia (excluding Japan), Europe and Latin America). The Adelington Design Group segment primarily consists of exclusive arrangements to supply jewelry for the LIZ CLAIBORNE and MONET brands. In addition, the Adelington Design Group segment serves J.C. Penney Corporation, Inc. (JCPenney) through exclusive supplier agreements for the LIZ CLAIBORNE and MONET jewelry lines. As of December 31, 2016, it operated 98 the United States Specialty Retail Stores; 35 Foreign Specialty Retail Stores; 65 the United States Outlet Stores; 17 Foreign Outlet Stores, and 54 Concessions.

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