Analyzing Bed Bath & Beyond (NASDAQ:BBBY) & Pier 1 Imports (PIR)
Bed Bath & Beyond (NASDAQ: BBBY) and Pier 1 Imports (NYSE:PIR) are both retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitabiliy, earnings, risk, valuation, dividends and analyst recommendations.
Bed Bath & Beyond pays an annual dividend of $0.60 per share and has a dividend yield of 2.0%. Pier 1 Imports pays an annual dividend of $0.28 per share and has a dividend yield of 6.2%. Bed Bath & Beyond pays out 13.9% of its earnings in the form of a dividend. Pier 1 Imports pays out 68.3% 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. Pier 1 Imports has raised its dividend for 4 consecutive years. Pier 1 Imports is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings & Valuation
This table compares Bed Bath & Beyond and Pier 1 Imports’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Bed Bath & Beyond||$12.22 billion||0.35||$1.36 billion||$4.33||6.95|
|Pier 1 Imports||$1.82 billion||0.21||$134.14 million||$0.41||11.10|
Bed Bath & Beyond has higher revenue and earnings than Pier 1 Imports. Bed Bath & Beyond is trading at a lower price-to-earnings ratio than Pier 1 Imports, indicating that it is currently the more affordable of the two stocks.
This table compares Bed Bath & Beyond and Pier 1 Imports’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Bed Bath & Beyond||5.22%||24.38%||9.34%|
|Pier 1 Imports||1.82%||13.96%||4.53%|
Insider and Institutional Ownership
92.5% of Bed Bath & Beyond shares are held by institutional investors. Comparatively, 86.0% of Pier 1 Imports shares are held by institutional investors. 5.0% of Bed Bath & Beyond shares are held by company insiders. Comparatively, 5.5% of Pier 1 Imports shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Volatility and Risk
Bed Bath & Beyond has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500. Comparatively, Pier 1 Imports has a beta of 1.7, meaning that its stock price is 70% more volatile than the S&P 500.
This is a breakdown of recent ratings and price targets for Bed Bath & Beyond and Pier 1 Imports, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Bed Bath & Beyond||8||12||1||0||1.67|
|Pier 1 Imports||4||11||2||0||1.88|
Bed Bath & Beyond currently has a consensus target price of $35.38, indicating a potential upside of 17.52%. Pier 1 Imports has a consensus target price of $6.08, indicating a potential upside of 33.67%. Given Pier 1 Imports’ stronger consensus rating and higher probable upside, analysts clearly believe Pier 1 Imports is more favorable than Bed Bath & Beyond.
Bed Bath & Beyond beats Pier 1 Imports on 9 of the 17 factors compared between the two stocks.
About Bed Bath & Beyond
Bed Bath & Beyond Inc. is a retailer, which operates under the names Bed Bath & Beyond (BBB), Christmas Tree Shops, Christmas Tree Shops andThat! or andThat! (collectively, CTS), Harmon or Harmon Face Values (collectively, Harmon), buybuy BABY (Baby) and World Market, Cost Plus World Market or Cost Plus (collectively, Cost Plus World Market). The Company operates in two segments: North American Retail and Institutional Sales. The Company sells a range of domestics merchandise and home furnishings. Domestics merchandise includes categories, such as bed linens and related items, bath items and kitchen textiles. Home furnishings include categories, such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables and juvenile products. The Company operates approximately 1,530 stores plus its various Websites, other interactive platforms and distribution facilities.
About Pier 1 Imports
Pier 1 Imports, Inc. is an importer of home decor and furniture. The Company’s operations consist of retail stores and an e-commerce Website conducting business under the name Pier 1 Imports, which sells a range of decorative accessories, furniture, candles, housewares, gifts and seasonal products. The Company’s categories of merchandise include decorative accessories and furniture. The decorative accessories category includes decorative accents and textiles, such as rugs, wall decorations and mirrors, candles, fragrance, gifts and seasonal items. The furniture category includes furniture and furniture cushions to be used in living, dining, office, sunrooms and patios. This merchandise group is generally made of metal or handcrafted natural materials, including rattan, pine, acacia, oak and other woods with either natural, stained, painted or upholstered finishes.
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