Critical Review: Staples (SPLS) & Ollie’s Bargain Outlet Holdings (OLLI)
Staples (NASDAQ: SPLS) and Ollie’s Bargain Outlet Holdings (NASDAQ:OLLI) are both mid-cap retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, analyst recommendations, earnings and risk.
Earnings & Valuation
This table compares Staples and Ollie’s Bargain Outlet Holdings’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Staples||$17.91 billion||0.38||$1.22 billion||($2.35)||-4.36|
|Ollie’s Bargain Outlet Holdings||$967.59 million||2.91||$127.79 million||$1.15||39.83|
Staples has higher revenue and earnings than Ollie’s Bargain Outlet Holdings. Staples is trading at a lower price-to-earnings ratio than Ollie’s Bargain Outlet Holdings, indicating that it is currently the more affordable of the two stocks.
Staples pays an annual dividend of $0.48 per share and has a dividend yield of 4.7%. Ollie’s Bargain Outlet Holdings does not pay a dividend. Staples pays out -20.4% of its earnings in the form of a dividend.
This table compares Staples and Ollie’s Bargain Outlet Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ollie’s Bargain Outlet Holdings||7.60%||10.44%||6.78%|
Risk and Volatility
Staples has a beta of 1.74, meaning that its stock price is 74% more volatile than the S&P 500. Comparatively, Ollie’s Bargain Outlet Holdings has a beta of 0.17, meaning that its stock price is 83% less volatile than the S&P 500.
Institutional and Insider Ownership
85.6% of Staples shares are owned by institutional investors. Comparatively, 92.2% of Ollie’s Bargain Outlet Holdings shares are owned by institutional investors. 0.7% of Staples shares are owned by company insiders. Comparatively, 22.3% of Ollie’s Bargain Outlet Holdings shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This is a summary of recent ratings and recommmendations for Staples and Ollie’s Bargain Outlet Holdings, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ollie’s Bargain Outlet Holdings||0||4||5||0||2.56|
Staples currently has a consensus target price of $8.85, suggesting a potential downside of 13.66%. Ollie’s Bargain Outlet Holdings has a consensus target price of $46.57, suggesting a potential upside of 1.68%. Given Ollie’s Bargain Outlet Holdings’ stronger consensus rating and higher probable upside, analysts plainly believe Ollie’s Bargain Outlet Holdings is more favorable than Staples.
Ollie’s Bargain Outlet Holdings beats Staples on 8 of the 15 factors compared between the two stocks.
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.
About Ollie’s Bargain Outlet Holdings
Ollie’s Bargain Outlet Holdings, Inc. is a retailer of brand name merchandise. The Company offers customers a selection of brand name products, including food, housewares, books and stationery, bed and bath, floor coverings, electronics and toys. Its warehouse format stores feature a range of products, including hardware, personal healthcare, candy, clothing, sporting goods, pet and lawn and garden products. It offers cooking utensils, dishes, appliances, plastic containers, coffee, bottled non-carbonated beverages, coffee, bottled non-carbonated beverages, bedding, towels, curtains, laminate flooring, commercial and residential carpeting, air conditioners, home electronics, cellular accessories, dolls, action figures, puzzles, action figures, puzzles, educational toys, board games, luggage, automotive, seasonal, furniture, summer furniture and lawn and garden. As of January 28, 2017, it had operated 234 stores across 19 contiguous states in the Eastern half of the United States.
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