J C Penney (NYSE: JCP) and Macy’s (NYSE:M) are both retail/wholesale companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, profitability, risk, earnings, analyst recommendations and valuation.

Analyst Recommendations

How to Become a New Pot Stock Millionaire

This is a breakdown of current recommendations and price targets for J C Penney and Macy’s, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
J C Penney 2 17 0 0 1.89
Macy’s 2 12 6 0 2.20

J C Penney presently has a consensus price target of $4.18, suggesting a potential upside of 31.97%. Macy’s has a consensus price target of $26.32, suggesting a potential downside of 9.54%. Given J C Penney’s higher possible upside, analysts plainly believe J C Penney is more favorable than Macy’s.

Insider and Institutional Ownership

74.5% of J C Penney shares are held by institutional investors. Comparatively, 86.9% of Macy’s shares are held by institutional investors. 1.5% of J C Penney shares are held by company insiders. Comparatively, 2.4% of Macy’s shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares J C Penney and Macy’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
J C Penney -0.93% 5.65% 0.80%
Macy’s 6.23% 24.93% 5.95%

Volatility & Risk

J C Penney has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Macy’s has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Dividends

Macy’s pays an annual dividend of $1.51 per share and has a dividend yield of 5.2%. J C Penney does not pay a dividend. Macy’s pays out 40.1% of its earnings in the form of a dividend. Macy’s has raised its dividend for 7 consecutive years.

Valuation and Earnings

This table compares J C Penney and Macy’s’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
J C Penney $12.51 billion 0.08 -$116.00 million $0.22 14.41
Macy’s $24.84 billion 0.36 $1.55 billion $3.77 7.72

Macy’s has higher revenue and earnings than J C Penney. Macy’s is trading at a lower price-to-earnings ratio than J C Penney, indicating that it is currently the more affordable of the two stocks.

Summary

Macy’s beats J C Penney on 13 of the 17 factors compared between the two stocks.

About J C Penney

J. C. Penney Company, Inc. is a holding company. The Company’s business consists of selling merchandise and services to consumers through its department stores and its Website at jcpenney.com. Its department stores and Website generally serve the same type of customers, its Website offers virtually the same mix of merchandise as its store assortment and other categories, and its department stores generally accept returns from sales made in stores and through its Website. It fulfills online customer purchases by direct shipment to the customer from its distribution facilities and stores or from its suppliers’ warehouses and by in store customer pick up. The Company sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products through Sephora inside JCPenney, home furnishings and appliances. In addition, its department stores provide its customers with services, such as styling salon, optical, portrait photography and custom decorating.

About Macy’s

Macy's, Inc., together with its subsidiaries, operates stores, Websites, and mobile applications. Its stores and Websites sell a range of merchandise, including apparel and accessories for men, women, and children; cosmetics; home furnishings; and other consumer goods. The company also operates stores that offer a range of women's, men's, and children's apparel; shoes; fashion accessories; housewares; home textiles; intimate apparel; and jewelry. As of January 4, 2018, it operated approximately 700 department stores under the Macy's and Bloomingdale's brands; 160 specialty stores under the Bloomingdale's, The Outlet, Bluemercury, and Macy's Backstage brands in the United States, the District of Columbia, Guam, and Puerto Rico; and Websites, including macys.com, bloomingdales.com, and bluemercury.com. In addition, it operates as a beauty products and spa retailer. The company was formerly known as Federated Department Stores, Inc. and changed its name to Macy's, Inc. in June 2007. Macy's, Inc. was founded in 1830 and is based in Cincinnati, Ohio.

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