Target (NYSE: TGT) is one of 12 public companies in the “Variety stores” industry, but how does it compare to its competitors? We will compare Target to similar businesses based on the strength of its valuation, analyst recommendations, earnings, dividends, profitability, risk and institutional ownership.

Dividends

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Target pays an annual dividend of $2.48 per share and has a dividend yield of 3.4%. Target pays out 52.7% of its earnings in the form of a dividend. As a group, “Variety stores” companies pay a dividend yield of 1.6% and pay out 36.6% of their earnings in the form of a dividend. Target has raised its dividend for 50 consecutive years.

Profitability

This table compares Target and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Target 4.08% 23.04% 6.71%
Target Competitors 3.76% 15.00% 6.64%

Valuation & Earnings

This table compares Target and its competitors gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Target $71.88 billion $2.93 billion 15.29
Target Competitors $65.63 billion $1.74 billion 22.12

Target has higher revenue and earnings than its competitors. Target is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Volatility and Risk

Target has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, Target’s competitors have a beta of 0.89, suggesting that their average stock price is 11% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Target and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Target 1 11 8 0 2.35
Target Competitors 164 1265 1701 90 2.53

Target presently has a consensus price target of $73.11, suggesting a potential upside of 1.54%. As a group, “Variety stores” companies have a potential upside of 3.50%. Given Target’s competitors stronger consensus rating and higher possible upside, analysts plainly believe Target has less favorable growth aspects than its competitors.

Insider & Institutional Ownership

87.0% of Target shares are held by institutional investors. Comparatively, 76.5% of shares of all “Variety stores” companies are held by institutional investors. 0.2% of Target shares are held by company insiders. Comparatively, 13.8% of shares of all “Variety stores” companies are held by company 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.

Summary

Target competitors beat Target on 8 of the 15 factors compared.

Target Company Profile

Target Corporation operates as a general merchandise retailer in the United States. The company offers beauty and household essentials, including beauty products, personal and baby care products, cleaning products, paper products, and pet supplies; food and beverage products, such as dry grocery, dairy, frozen food, beverage, candy, snacks, deli, bakery, meat, and produce products; and apparel for women, men, boys, girls, toddlers, infants, and newborns, as well as intimate apparel, jewelry, accessories, and shoes. It also provides home furnishings and décor comprising furniture, lighting, kitchenware, small appliances, home décor, bed and bath products, home improvement products, and automotive products, as well as seasonal merchandise comprising patio furniture and holiday décor; and music, movies, books, computer software, sporting goods, and toys, as well as electronics that include video game hardware and software. In addition, the company offers in-store amenities, which comprise Target Café, Target Optical, Starbucks, and other food service offerings. It sells its products through its stores; and digital channels, including Target.com. As of March 8, 2018, the company operated 1,826 stores. Target Corporation was founded in 1902 and is headquartered in Minneapolis, Minnesota.

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