Dollar Tree (NASDAQ: DLTR) and PriceSmart (NASDAQ:PSMT) are both mid-cap retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, dividends, institutional ownership, profitability, valuation and analyst recommendations.

Earnings & Valuation

This table compares Dollar Tree and PriceSmart’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Dollar Tree $20.92 billion 0.83 $2.30 billion $3.65 20.14
PriceSmart $2.97 billion 0.83 $184.93 million $3.08 26.66

Dollar Tree has higher revenue and earnings than PriceSmart. Dollar Tree is trading at a lower price-to-earnings ratio than PriceSmart, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

91.7% of Dollar Tree shares are owned by institutional investors. Comparatively, 73.6% of PriceSmart shares are owned by institutional investors. 4.1% of Dollar Tree shares are owned by insiders. Comparatively, 28.0% of PriceSmart shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Dollar Tree and PriceSmart, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dollar Tree 1 10 11 0 2.45
PriceSmart 0 0 1 0 3.00

Dollar Tree currently has a consensus price target of $87.00, indicating a potential upside of 18.37%. PriceSmart has a consensus price target of $102.00, indicating a potential upside of 24.24%. Given PriceSmart’s stronger consensus rating and higher probable upside, analysts plainly believe PriceSmart is more favorable than Dollar Tree.

Profitability

This table compares Dollar Tree and PriceSmart’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dollar Tree 4.13% 17.68% 5.76%
PriceSmart 3.13% 14.05% 8.26%

Dividends

PriceSmart pays an annual dividend of $0.70 per share and has a dividend yield of 0.9%. Dollar Tree does not pay a dividend. PriceSmart pays out 22.7% of its earnings in the form of a dividend.

Volatility and Risk

Dollar Tree has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, PriceSmart has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.

Summary

Dollar Tree beats PriceSmart on 9 of the 16 factors compared between the two stocks.

About Dollar Tree

Dollar Tree, Inc. is an operator of discount variety stores. As of January 28, 2017, the Company operated 14,334 stores in 48 states and the District of Columbia, and five Canadian provinces. Its segments include Dollar Tree and Family Dollar. The Dollar Tree segment is the operator of discount variety stores offering merchandise at a fixed price. The Family Dollar segment operates a chain of general merchandise retail discount stores providing consumers with a selection of merchandise in neighborhood stores. Its stores operate under the names of Dollar Tree, Family Dollar and Dollar Tree Canada. As of January 28, 2017, the Dollar Tree segment included 6,360 stores operating under the Dollar Tree and Dollar Tree Canada brands, 11 distribution centers in the United States and two in Canada and a Store Support Center in Chesapeake, Virginia, and 11 distribution centers and a Store Support Center in Matthews, North Carolina under the Family Dollar brand.

About PriceSmart

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.

Receive News & Ratings for Dollar Tree Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Dollar Tree Inc. and related companies with MarketBeat.com's FREE daily email newsletter.