The Tile Shop (NASDAQ: TTS) and Bed Bath & Beyond (NASDAQ:BBBY) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, profitability, institutional ownership, risk and valuation.
The Tile Shop pays an annual dividend of $0.20 per share and has a dividend yield of 3.1%. Bed Bath & Beyond pays an annual dividend of $0.60 per share and has a dividend yield of 3.5%. The Tile Shop pays out 62.5% of its earnings in the form of a dividend. Bed Bath & Beyond pays out 19.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Bed Bath & Beyond is clearly the better dividend stock, given its higher yield and lower payout ratio.
The Tile Shop has a beta of 1.72, suggesting that its share price is 72% more volatile than the S&P 500. Comparatively, Bed Bath & Beyond has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.
This is a breakdown of current ratings and recommmendations for The Tile Shop and Bed Bath & Beyond, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The Tile Shop||1||6||0||0||1.86|
|Bed Bath & Beyond||10||11||1||0||1.59|
The Tile Shop presently has a consensus target price of $7.16, indicating a potential upside of 11.83%. Bed Bath & Beyond has a consensus target price of $22.41, indicating a potential upside of 29.10%. Given Bed Bath & Beyond’s higher possible upside, analysts clearly believe Bed Bath & Beyond is more favorable than The Tile Shop.
Insider and Institutional Ownership
65.1% of The Tile Shop shares are owned by institutional investors. Comparatively, 92.8% of Bed Bath & Beyond shares are owned by institutional investors. 24.3% of The Tile Shop shares are owned by insiders. Comparatively, 5.0% of Bed Bath & Beyond shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares The Tile Shop and Bed Bath & Beyond’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|The Tile Shop||$344.60 million||0.97||$10.81 million||$0.32||20.00|
|Bed Bath & Beyond||$12.35 billion||0.20||$424.85 million||$3.12||5.56|
Bed Bath & Beyond has higher revenue and earnings than The Tile Shop. Bed Bath & Beyond is trading at a lower price-to-earnings ratio than The Tile Shop, indicating that it is currently the more affordable of the two stocks.
This table compares The Tile Shop and Bed Bath & Beyond’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|The Tile Shop||1.99%||8.26%||4.60%|
|Bed Bath & Beyond||3.44%||16.45%||6.51%|
Bed Bath & Beyond beats The Tile Shop on 11 of the 16 factors compared between the two stocks.
The Tile Shop Company Profile
Tile Shop Holdings, Inc. operates as a specialty retailer of manufactured and natural stone tiles, setting and maintenance materials, and related accessories in the United States. It offers approximately 4,000 products, including marble, travertine, granite, quartz, sandstone, slate, and onyx tiles; and ceramic, porcelain, glass, cement, wood look, and metal tiles primarily under the Rush River and Fired Earth brands. The company also manufactures setting and maintenance materials, such as thinset, grout, sealers, and accessories, including installation tools, shower and bath shelves, drains, and similar products under the Superior brand name. As of March 1, 2018, it operated 140 stores in 31 states and the District of Columbia with an average size of 20,300 square feet. The company also sells its products through its Website, tileshop.com. Tile Shop Holdings, Inc. was founded in 1985 and is headquartered in Plymouth, Minnesota.
Bed Bath & Beyond Company Profile
Bed Bath & Beyond Inc., together with its subsidiaries, operates a chain of retail stores. It sells a range of domestics merchandise, including bed linens and related items, bath items, and kitchen textiles; and home furnishings, such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables, and juvenile products. It also provides various textile products, amenities, and other goods to institutional customers in the hospitality, cruise line, healthcare, and other industries. As of December 20, 2017, the company had a total of 1,558 stores, includes 1,020 Bed Bath & Beyond stores in 50 states, the District of Columbia, Puerto Rico, and Canada; 280 stores under the names of World Market, Cost Plus World Market, or Cost Plus; 118 buybuy BABY stores; 83 stores under the Christmas Tree Shops, Christmas Tree Shops andThat! or andThat! names; and 57 stores under the Harmon, Harmon Face Values, or Face Values. It also offers products through various Websites and applications, such as bedbathandbeyond.com, bedbathandbeyond.ca, harmondiscount.com, christmastreeshops.com, buybuybaby.com, buybuybaby.ca, harborlinen.com, t-ygroup.com, and worldmarket.com. In addition, the Company operates Of a Kind, an e-commerce Website that features specially commissioned limited edition items from emerging fashion and home designers; One Kings Lane, an online authority in home décor and design that offers a collection of selected home goods, and designer and vintage items; PersonalizationMall.com, an online retailer of personalized products; Chef Central, an online retailer of kitchenware, cookware, and homeware items catering to cooking and baking enthusiasts; and Decorist, an online interior design platform that provides personalized home design services. Bed Bath & Beyond Inc. was founded in 1971 and is based in Union, New Jersey.
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