PriceSmart (NASDAQ: PSMT) and TJX Companies, Inc. (The) (NYSE:TJX) are both mid-cap retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, risk, valuation, earnings, analyst recommendations, profitabiliy and dividends.

Profitability

This table compares PriceSmart and TJX Companies, Inc. (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PriceSmart 3.13% 14.05% 8.26%
TJX Companies, Inc. (The) 6.96% 53.34% 18.97%

Volatility & Risk

PriceSmart has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500. Comparatively, TJX Companies, Inc. (The) has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500.

Dividends

PriceSmart pays an annual dividend of $0.70 per share and has a dividend yield of 0.8%. TJX Companies, Inc. (The) pays an annual dividend of $1.25 per share and has a dividend yield of 1.7%. PriceSmart pays out 22.7% of its earnings in the form of a dividend. TJX Companies, Inc. (The) pays out 35.5% 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. PriceSmart has increased its dividend for 20 consecutive years.

Analyst Ratings

This is a summary of current ratings and target prices for PriceSmart and TJX Companies, Inc. (The), as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PriceSmart 0 0 1 0 3.00
TJX Companies, Inc. (The) 0 3 12 1 2.88

PriceSmart currently has a consensus price target of $102.00, indicating a potential upside of 21.86%. TJX Companies, Inc. (The) has a consensus price target of $84.19, indicating a potential upside of 17.74%. Given PriceSmart’s stronger consensus rating and higher probable upside, equities analysts clearly believe PriceSmart is more favorable than TJX Companies, Inc. (The).

Valuation & Earnings

This table compares PriceSmart and TJX Companies, Inc. (The)’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PriceSmart $2.97 billion 0.85 $184.93 million $3.08 27.18
TJX Companies, Inc. (The) $33.43 billion 1.38 $4.53 billion $3.52 20.31

TJX Companies, Inc. (The) has higher revenue and earnings than PriceSmart. TJX Companies, Inc. (The) is trading at a lower price-to-earnings ratio than PriceSmart, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

73.6% of PriceSmart shares are owned by institutional investors. Comparatively, 89.9% of TJX Companies, Inc. (The) shares are owned by institutional investors. 28.0% of PriceSmart shares are owned by insiders. Comparatively, 0.2% of TJX Companies, Inc. (The) shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

TJX Companies, Inc. (The) beats PriceSmart on 11 of the 18 factors compared between the two stocks.

PriceSmart Company Profile

PriceSmart, Inc., through its subsidiaries, is engaged in the international operation of membership shopping in warehouse clubs. In addition, the Company operates distribution centers and offices in the United States. The Company’s segments include the United States, Central America, the Caribbean and Colombia. The Company owns and operates the United States-style membership shopping warehouse clubs in Latin America and the Caribbean. It offers private label consumer goods to individuals and businesses. The Company offers three types of memberships, such as Business, Diamond and in Costa Rica Platinum memberships. It promotes Business membership through its marketing programs and offers certain merchandise targeted to businesses, such as restaurants, hotels, convenience stores, offices and institutions. The Diamond membership is focused on individuals and families. The Company offers Platinum memberships in Costa Rica.

TJX Companies, Inc. (The) Company Profile

The TJX Companies, Inc. (TJX) is an off-price apparel and home fashions retailer in the United States and across the world. The Company operates through four segments: Marmaxx, HomeGoods, TJX Canada and TJX International. T.J. Maxx and Marshalls chains in the United States were collectively the off-price retailer in the United States with a total of 2,221 stores, as of January 28, 2017. The HomeGoods chain was an off-price retailer of home fashions in the United States with 579 stores. The TJX Canada segment operates the Winners, HomeSense and Marshalls chains in Canada. Winners is the off-price apparel and home fashions retailer in Canada. HomeSense offers home fashions off-price concept in Canada. The TJX International segment operates the T.K. Maxx and HomeSense chains in Europe. With 503 stores, T.K. Maxx operated in the United Kingdom, Ireland, Germany, Poland, Austria and the Netherlands.

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