Staples (NASDAQ: SPLS) and Barnes & Noble Education (NYSE:BNED) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, profitabiliy, dividends, valuation and risk.

Risk & Volatility

Staples has a beta of 1.7, indicating that its share price is 70% more volatile than the S&P 500. Comparatively, Barnes & Noble Education has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Staples and Barnes & Noble Education, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Staples 0 6 1 0 2.14
Barnes & Noble Education 0 0 1 0 3.00

Staples currently has a consensus target price of $9.04, suggesting a potential downside of 11.23%. Barnes & Noble Education has a consensus target price of $14.00, suggesting a potential upside of 92.84%. Given Barnes & Noble Education’s stronger consensus rating and higher possible upside, analysts clearly believe Barnes & Noble Education is more favorable than Staples.

Dividends

Staples pays an annual dividend of $0.48 per share and has a dividend yield of 4.7%. Barnes & Noble Education does not pay a dividend. Staples pays out -13.3% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Staples and Barnes & Noble Education’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Staples $18.03 billion 0.37 $1.26 billion ($3.61) -2.82
Barnes & Noble Education $1.87 billion 0.18 $78.29 million $0.11 66.01

Staples has higher revenue and earnings than Barnes & Noble Education. Staples is trading at a lower price-to-earnings ratio than Barnes & Noble Education, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Staples and Barnes & Noble Education’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Staples -12.51% 14.07% 6.61%
Barnes & Noble Education 0.29% 1.15% 0.58%

Institutional and Insider Ownership

91.9% of Staples shares are owned by institutional investors. Comparatively, 68.6% of Barnes & Noble Education shares are owned by institutional investors. 0.7% of Staples shares are owned by company insiders. Comparatively, 2.4% of Barnes & Noble Education shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Staples beats Barnes & Noble Education on 9 of the 15 factors compared between the two stocks.

Staples Company Profile

Staples, Inc. (Staples) is a provider of products and services that serve the needs of business customers and consumers. The Company offers a range of print and marketing and technology services. The Company’s segments include North American Delivery, North American Retail and Other. The North American Delivery segment consists of the United States and Canadian businesses, including Staples Business Advantage, staples.com, staples.ca, and quill.com, that sell and deliver products and services primarily to businesses. The North American Retail segment includes its retail stores in the United States and Canada. As of January 28, 2017, its North American Retail segment consisted of 1,255 stores in the United States and 304 stores in Canada. The Company has other businesses in Australia, South America and Asia. Staples Australia serves primarily contract and government customers in Australia and New Zealand. The Company also has operations in China, Argentina, Taiwan and Brazil.

Barnes & Noble Education Company Profile

Barnes & Noble Education, Inc. is a contract operator of bookstores on college and university campuses across the United States and a provider of digital education services. The Company offers a support system, and a retail and digital learning experience for students. Through its subsidiary, Barnes & Noble College Booksellers, LLC, the Company operates approximately 750 campus bookstores and the school-branded e-commerce sites for each store, serving over five million college students and their faculty. The Company offers a set of products and services to help students, faculty and administrators achieve their shared educational and social goals. Its suite of product offerings includes Textbook and Course Material Sales, Textbook and Course Material Rentals, General Merchandise, Trade, Digital Education and Brand Partnerships. The Company also offers other merchandise, such as laptops and other technology products, notebooks, backpacks, school and dormitory supplies and related items.

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