Kirkland’s (NASDAQ:KIRK) and Star Group (NYSE:SGU) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.

Insider & Institutional Ownership

98.7% of Kirkland’s shares are held by institutional investors. Comparatively, 44.0% of Star Group shares are held by institutional investors. 3.7% of Kirkland’s shares are held by insiders. Comparatively, 20.4% of Star Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Kirkland’s and Star Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kirkland’s 0.45% 3.61% 1.70%
Star Group 3.64% 14.21% 6.20%

Dividends

Star Group pays an annual dividend of $0.47 per share and has a dividend yield of 4.9%. Kirkland’s does not pay a dividend.

Analyst Ratings

This is a summary of recent ratings for Kirkland’s and Star Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kirkland’s 0 0 2 0 3.00
Star Group 0 0 0 0 N/A

Kirkland’s presently has a consensus price target of $14.50, suggesting a potential upside of 60.04%. Given Kirkland’s’ higher probable upside, equities research analysts clearly believe Kirkland’s is more favorable than Star Group.

Risk and Volatility

Kirkland’s has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, Star Group has a beta of 0.1, indicating that its share price is 90% less volatile than the S&P 500.

Valuation & Earnings

This table compares Kirkland’s and Star Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kirkland’s $634.12 million 0.22 $5.29 million $0.38 23.84
Star Group $1.32 billion 0.39 $26.90 million N/A N/A

Star Group has higher revenue and earnings than Kirkland’s.

Summary

Star Group beats Kirkland’s on 8 of the 13 factors compared between the two stocks.

Kirkland’s Company Profile

Kirkland's, Inc. operates as a specialty retailer of home décor in the United States. The company's stores provide various merchandise, including holiday décor, framed arts, furniture, ornamental wall décor, fragrance and accessories, mirrors, lamps, decorative accessories, textiles, housewares, gifts, artificial floral products, frames, clocks, and outdoor living items. Its stores also offer an assortment of holiday merchandise in seasonal periods, as well as items that are suitable for gift-giving. The company operates its stores under the Kirkland's, Kirkland's Home, Kirkland's Home Outlet, Kirkland's Outlet, and The Kirkland Collection names in various off-mall venues comprising power strip centers, lifestyle centers, outlet centers, and freestanding locations, as well as enclosed malls. As of March 16, 2018, it operated 420 stores in 36 states. The company also sells its products through its kirklands.com Website. Kirkland's, Inc. was founded in 1966 and is based in Brentwood, Tennessee.

Star Group Company Profile

Star Group, L.P. operates as a home heating oil and propane distributor and services provider in the United States. It also installs, maintains, and repairs heating and air conditioning equipment, as well as offers ancillary home services, including home security and plumbing. As of September 30, 2017, the company sold home heating oil and propane to approximately 455,000 full service residential and commercial customers. It also sells home heating oil, gasoline, and diesel fuel to approximately 74,000 customers on a delivery only basis. The company was formerly known as Star Gas Partners, L.P. and changed its name to Star Group, L.P. in October 2017. Star Group, L.P. was founded in 1995 and is headquartered in Stamford, Connecticut.

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