Conn’s (NASDAQ:CONN) and GOME ELECTRICAL/ADR (OTCMKTS:GMELY) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, valuation and risk.

Risk & Volatility

Conn’s has a beta of 1.85, meaning that its stock price is 85% more volatile than the S&P 500. Comparatively, GOME ELECTRICAL/ADR has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500.

Earnings & Valuation

This table compares Conn’s and GOME ELECTRICAL/ADR’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Conn’s $1.52 billion 0.53 $6.46 million $0.95 26.47
GOME ELECTRICAL/ADR $10.59 billion 0.20 -$66.58 million N/A N/A

Conn’s has higher earnings, but lower revenue than GOME ELECTRICAL/ADR.

Profitability

This table compares Conn’s and GOME ELECTRICAL/ADR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Conn’s 2.25% 10.05% 2.98%
GOME ELECTRICAL/ADR N/A N/A N/A

Insider and Institutional Ownership

72.1% of Conn’s shares are owned by institutional investors. 3.3% of Conn’s 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 Recommendations

This is a summary of current ratings and price targets for Conn’s and GOME ELECTRICAL/ADR, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Conn’s 0 1 5 0 2.83
GOME ELECTRICAL/ADR 0 0 0 0 N/A

Conn’s currently has a consensus price target of $42.75, indicating a potential upside of 69.98%. Given Conn’s’ higher possible upside, analysts clearly believe Conn’s is more favorable than GOME ELECTRICAL/ADR.

Summary

Conn’s beats GOME ELECTRICAL/ADR on 10 of the 11 factors compared between the two stocks.

About Conn’s

Conn's, Inc. operates as a specialty retailer of durable consumer goods and related services in the United States. The company operates through two segments, Retail and Credit. Its stores provide furniture and mattress, including furniture and related accessories for the living room, dining room, and bedroom, as well as traditional and specialty mattresses; home appliances, such as refrigerators, freezers, washers, dryers, dishwashers, and ranges; consumer electronics comprising televisions, Blu-ray players, home theaters, and portable audio equipment; and home office products consisting of computers, printers, and accessories. The company also provides short- and medium-term financing to its retail customers; and product support services, such as next-day delivery and installation services, credit insurance products, product repair services, and repair service agreements. As of September 4, 2018, it operated 119 HomePlus retail locations in Alabama, Arizona, Colorado, Georgia, Louisiana, Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, and Virginia. Conn's, Inc. was founded in 1890 and is headquartered in The Woodlands, Texas.

About GOME ELECTRICAL/ADR

GOME Retail Holdings Limited, together with its subsidiaries, engages in the retail of home appliances and consumer electronic products in the People's Republic of China. The company is also involved in the provision of logistics and procurement, storage and delivery, IT development, and business management services; retailing of mobile phones and accessories; and online retail of electrical appliances and consumer electronic products, as well as in property holding activities. In addition, it engages in the trading of wine products. The company also sells its products through Internet retail platforms. As of December 31, 2017, it operated 1,604 stores in 425 cities. The company was formerly known as GOME Electrical Appliances Holding Limited and changed its name to GOME Retail Holdings Limited in August 2017. GOME Retail Holdings Limited was founded in 1987 and is headquartered in Central, Hong Kong.

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