Reviewing Tandy Leather Factory (NASDAQ:TLF) & Ross Stores (NASDAQ:ROST)

Tandy Leather Factory (NASDAQ:TLF) and Ross Stores (NASDAQ:ROST) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, institutional ownership and earnings.

Profitability

This table compares Tandy Leather Factory and Ross Stores’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tandy Leather Factory	-2.14%	-3.31%	-1.98%
Ross Stores	10.85%	39.29%	15.79%

Insider & Institutional Ownership

56.4% of Tandy Leather Factory shares are held by institutional investors. Comparatively, 86.9% of Ross Stores shares are held by institutional investors. 36.2% of Tandy Leather Factory shares are held by company insiders. Comparatively, 2.1% of Ross Stores shares are held 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.

Risk and Volatility

Tandy Leather Factory has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500. Comparatively, Ross Stores has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500.

Valuation and Earnings

This table compares Tandy Leather Factory and Ross Stores”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tandy Leather Factory	$76.32 million	0.27	$9.10 million	($0.17)	-14.65
Ross Stores	$22.75 billion	3.28	$2.15 billion	$8.26	28.26

Ross Stores has higher revenue and earnings than Tandy Leather Factory. Tandy Leather Factory is trading at a lower price-to-earnings ratio than Ross Stores, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Tandy Leather Factory and Ross Stores, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tandy Leather Factory	1	0	0	0	1.00
Ross Stores	0	6	15	0	2.71

Ross Stores has a consensus target price of $263.76, indicating a potential upside of 13.01%. Given Ross Stores’ stronger consensus rating and higher possible upside, analysts plainly believe Ross Stores is more favorable than Tandy Leather Factory.

Summary

Ross Stores beats Tandy Leather Factory on 13 of the 14 factors compared between the two stocks.

About Tandy Leather Factory

Tandy Leather Factory, Inc. engages in the distribution of leather and related products. It offers leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, saddle and tack hardware, and do-it-yourself kits. It operates through North America and International geographical segments. The North America geographical segment consists of 115 stores, which offer a broad selection of products combined with leathercraft expertise in a one-stop shop. The International geographical segment comprises of similar to North America segment but generally located in light industrial areas. The company was founded by J. Wray Thompson, Sr. and Ronald C. Morgan in 1980 and is headquartered in Fort Worth, TX.

About Ross Stores

Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd’s DISCOUNTS brand names in the United States. Its stores primarily offer apparel, accessories, footwear, and home fashions. The company’s Ross Dress for Less stores sell its products at department and specialty stores to middle income households; and dd’s DISCOUNTS stores sell its products at department and discount stores for households with moderate income. Ross Stores, Inc. was incorporated in 1957 and is headquartered in Dublin, California.