Cabela’s (NYSE: CAB) and Rent-A-Center (NASDAQ:RCII) are both retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitabiliy, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.
Valuation and Earnings
This table compares Cabela’s and Rent-A-Center’s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Cabela’s | $4.10 billion | 0.98 | $468.84 million | $2.08 | 28.01 |
| Rent-A-Center | $2.87 billion | 0.24 | $145.79 million | N/A | N/A |
Cabela’s has higher revenue and earnings than Rent-A-Center.
Dividends
Rent-A-Center pays an annual dividend of $0.32 per share and has a dividend yield of 2.5%. Cabela’s does not pay a dividend.
Analyst Recommendations
This is a breakdown of current ratings and target prices for Cabela’s and Rent-A-Center, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Cabela’s | 0 | 8 | 1 | 0 | 2.11 |
| Rent-A-Center | 2 | 3 | 2 | 1 | 2.25 |
Cabela’s currently has a consensus target price of $59.36, indicating a potential upside of 1.87%. Rent-A-Center has a consensus target price of $10.75, indicating a potential downside of 15.82%. Given Cabela’s’ higher possible upside, equities analysts plainly believe Cabela’s is more favorable than Rent-A-Center.
Profitability
This table compares Cabela’s and Rent-A-Center’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Cabela’s | 3.49% | 8.97% | 2.02% |
| Rent-A-Center | -4.77% | -30.44% | -7.06% |
Insider & Institutional Ownership
58.2% of Cabela’s shares are owned by institutional investors. 21.0% of Cabela’s shares are owned by insiders. Comparatively, 3.4% of Rent-A-Center shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Volatility and Risk
Cabela’s has a beta of 0.16, indicating that its share price is 84% less volatile than the S&P 500. Comparatively, Rent-A-Center has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500.
Summary
Cabela’s beats Rent-A-Center on 10 of the 15 factors compared between the two stocks.
Cabela’s Company Profile
Cabela’s Incorporated is an omni-channel retailer of hunting, fishing, camping, shooting sports and related outdoor merchandise. The Company offers its customers a selection of national and regional brand products, including its Cabela’s brand. The Company’s segments include Merchandising and Financial Services. The Merchandising segment sells products and services through the Company’s retail stores, its e-commerce Websites (Cabelas.com and Cabelas.ca), and its catalogs. The United States merchandising and Canada merchandising operating segments have been aggregated into its Merchandising segment. The Financial Services segment issues co-branded credit cards, which are available through all of its channels. The Company’s product assortment includes merchandise and equipment for hunting, fishing, marine use, camping, and recreational sport shooting, along with casual and outdoor apparel and footwear, optics, vehicle accessories, and gifts and home furnishings with an outdoor theme.
Rent-A-Center Company Profile
Rent-A-Center, Inc. is a rent-to-own operator in North America. The Company provides an opportunity to obtain ownership of products, such as consumer electronics, appliances, computers (including tablets), smartphones and furniture (including accessories), under rental purchase agreements. The Company operates in four segments: Core U.S., Acceptance Now, Mexico, and Franchising. As of December 31, 2016, the Company operated over 2,463 Company-owned stores in the United States, Canada and Puerto Rico. The Company’s Mexico segment consists of the Company-owned rent-to-own stores in Mexico. As of December 31, 2016, the Company operated 130 stores in this segment. Its Franchising segment engages in the sale of rental merchandise to its franchisees. As of December 31, 2016, the Company’s Franchising segment franchised 229 stores in 31 states operating under the Rent-A-Center (152 stores), ColorTyme (39 stores) and RimTyme (38 stores) names.
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