Kohl’s (NYSE:KSS) and Sears Hometown and Outlet Stores (NASDAQ:SHOS) are both retail/wholesale companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, valuation, earnings and dividends.

Risk & Volatility

Kohl’s has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, Sears Hometown and Outlet Stores has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500.

Dividends

Kohl’s pays an annual dividend of $2.44 per share and has a dividend yield of 3.6%. Sears Hometown and Outlet Stores does not pay a dividend. Kohl’s pays out 58.2% of its earnings in the form of a dividend. Kohl’s has raised its dividend for 8 consecutive years.

Analyst Recommendations

This is a summary of current ratings and price targets for Kohl’s and Sears Hometown and Outlet Stores, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kohl’s 2 10 9 0 2.33
Sears Hometown and Outlet Stores 0 0 0 0 N/A

Kohl’s currently has a consensus price target of $76.42, indicating a potential upside of 13.60%. Given Kohl’s’ higher possible upside, analysts clearly believe Kohl’s is more favorable than Sears Hometown and Outlet Stores.

Profitability

This table compares Kohl’s and Sears Hometown and Outlet Stores’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kohl’s 4.94% 16.06% 6.55%
Sears Hometown and Outlet Stores -3.65% -35.03% -14.10%

Insider & Institutional Ownership

44.7% of Sears Hometown and Outlet Stores shares are held by institutional investors. 1.2% of Kohl’s shares are held by insiders. Comparatively, 0.6% of Sears Hometown and Outlet Stores shares are held 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.

Valuation and Earnings

This table compares Kohl’s and Sears Hometown and Outlet Stores’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kohl’s $19.10 billion 0.58 $859.00 million $4.19 16.05
Sears Hometown and Outlet Stores $1.72 billion 0.03 -$95.05 million N/A N/A

Kohl’s has higher revenue and earnings than Sears Hometown and Outlet Stores.

Summary

Kohl’s beats Sears Hometown and Outlet Stores on 12 of the 14 factors compared between the two stocks.

Kohl’s Company Profile

Kohl's Corporation operates as an omni-channel retailer in the United States. Its stores and Website offer apparel, footwear, accessories, beauty, and home products. As of February 3, 2018, it operated 1,158 department stores; a Website Kohls.com; and 12 FILA outlets, and 4 Off-Aisle clearance centers. Kohl's Corporation was founded in 1962 and is headquartered in Menomonee Falls, Wisconsin.

Sears Hometown and Outlet Stores Company Profile

Sears Hometown and Outlet Stores, Inc. engages in the retail sale of home appliances, lawn and garden equipment, tools, and hardware in the United States. The company operates in two segments, Sears Hometown and Hardware, and Sears Outlet. The Sears Hometown and Hardware segment operates Sears Hometown Stores that offer products and services across a selection of merchandise categories, including home appliances, lawn and garden equipment, tools, sporting goods, and household goods; and Sears Hardware Stores, which provide products and services across a range of merchandise categories, such as home appliances, lawn and garden equipment, tools, other home improvement products, fasteners, electrical supplies, and plumbing supplies. It also operates Sears Home Appliance Showrooms that offer home appliances and related services in stores primarily located in strip malls and lifestyle centers of metropolitan areas. The Sears Outlet segment provides in-store and online access to purchase outlet-value products across an assortment of merchandise categories, including home appliances, mattresses, apparel, sporting goods, lawn and garden equipment, and tools, as well as other household goods, such as furniture. This segment also sells its products and services through searsoutlet.com. The company also offers various services, such as home delivery, installation, and extended service plans. As of August 4, 2018, the company, and its dealers and franchisees operated 783 stores in 49 states in the United States, as well as in Puerto Rico and Bermuda. Sears Hometown and Outlet Stores, Inc. is headquartered in Hoffman Estates, Illinois.

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