Comparing Tuesday Morning Corp. (TUES) and Dollar Tree (DLTR)

Tuesday Morning Corp. (NASDAQ: TUES) and Dollar Tree (NASDAQ:DLTR) are both retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitabiliy, analyst recommendations and valuation.

Insider & Institutional Ownership

92.2% of Tuesday Morning Corp. shares are owned by institutional investors. Comparatively, 92.4% of Dollar Tree shares are owned by institutional investors. 4.4% of Tuesday Morning Corp. shares are owned by insiders. Comparatively, 2.9% of Dollar Tree 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.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Tuesday Morning Corp. and Dollar Tree, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tuesday Morning Corp.	0	3	0	0	2.00
Dollar Tree	1	10	11	0	2.45

Tuesday Morning Corp. currently has a consensus target price of $2.55, indicating a potential upside of 41.67%. Dollar Tree has a consensus target price of $87.70, indicating a potential upside of 26.59%. Given Tuesday Morning Corp.’s higher possible upside, analysts clearly believe Tuesday Morning Corp. is more favorable than Dollar Tree.

Valuation & Earnings

This table compares Tuesday Morning Corp. and Dollar Tree’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Tuesday Morning Corp.	$965.84 million	0.08	-$1.17 million	($0.44)	-4.09
Dollar Tree	$20.92 billion	0.78	$2.30 billion	$3.65	18.98

Dollar Tree has higher revenue and earnings than Tuesday Morning Corp.. Tuesday Morning Corp. is trading at a lower price-to-earnings ratio than Dollar Tree, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Tuesday Morning Corp. has a beta of 2.13, meaning that its share price is 113% more volatile than the S&P 500. Comparatively, Dollar Tree has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500.

Profitability

This table compares Tuesday Morning Corp. and Dollar Tree’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tuesday Morning Corp.	-1.97%	-8.56%	-4.85%
Dollar Tree	4.13%	17.68%	5.76%

Summary

Dollar Tree beats Tuesday Morning Corp. on 10 of the 13 factors compared between the two stocks.

Tuesday Morning Corp. Company Profile

Tuesday Morning Corporation is an off-price retailer. The Company specializes in selling discounted, upscale decorative home accessories, housewares, seasonal goods and famous-maker gifts. The Company operated 751 stores in 40 states in the United States, as of June 30, 2016. The Company offers products in a range of categories, such as home decor, furniture, bed and bath, kitchen, toys, crafts, pets and seasonal goods. The Company offers branded merchandise, such as Peacock Alley, Sferra, Lenox, Waterford and Hartmann. In addition to branded goods, it also carries home furnishings items made around the world. The Company’s stores operate in both primary and secondary locations of the suburban markets, such as strip malls, near its middle and upper-income customers. The Company utilizes distribution center facilities in Dallas, Texas and Phoenix, Arizona.

Dollar Tree Company Profile

Dollar Tree, Inc. is an operator of discount variety stores. As of January 28, 2017, the Company operated 14,334 stores in 48 states and the District of Columbia, and five Canadian provinces. Its segments include Dollar Tree and Family Dollar. The Dollar Tree segment is the operator of discount variety stores offering merchandise at a fixed price. The Family Dollar segment operates a chain of general merchandise retail discount stores providing consumers with a selection of merchandise in neighborhood stores. Its stores operate under the names of Dollar Tree, Family Dollar and Dollar Tree Canada. As of January 28, 2017, the Dollar Tree segment included 6,360 stores operating under the Dollar Tree and Dollar Tree Canada brands, 11 distribution centers in the United States and two in Canada and a Store Support Center in Chesapeake, Virginia, and 11 distribution centers and a Store Support Center in Matthews, North Carolina under the Family Dollar brand.