Reviewing Best Buy (NYSE:BBY) and Tandy Leather Factory (NASDAQ:TLF)

Tandy Leather Factory (NASDAQ:TLF) and Best Buy (NYSE:BBY) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, institutional ownership, earnings, valuation, risk and analyst recommendations.

Profitability

This table compares Tandy Leather Factory and Best Buy’s 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%
Best Buy	3.01%	48.14%	9.16%

Valuation & Earnings

This table compares Tandy Leather Factory and Best Buy”s revenue, earnings per share (EPS) 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)	-14.74
Best Buy	$41.69 billion	0.44	$1.07 billion	$6.01	14.48

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

Risk and Volatility

Tandy Leather Factory has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500. Comparatively, Best Buy has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for Tandy Leather Factory and Best Buy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tandy Leather Factory	1	0	0	0	1.00
Best Buy	2	11	7	1	2.33

Best Buy has a consensus price target of $85.65, indicating a potential downside of 1.57%. Given Best Buy’s stronger consensus rating and higher probable upside, analysts clearly believe Best Buy is more favorable than Tandy Leather Factory.

Insider & Institutional Ownership

56.4% of Tandy Leather Factory shares are held by institutional investors. Comparatively, 81.0% of Best Buy shares are held by institutional investors. 36.2% of Tandy Leather Factory shares are held by company insiders. Comparatively, 0.5% of Best Buy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Best Buy beats Tandy Leather Factory on 14 of the 15 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 Best Buy

Best Buy Co., Inc. engages in the retail of technology products in the United States, Canada, and international. Its stores provide computing and mobile phone products, such as desktops, notebooks, and peripherals; mobile phones comprising related mobile network carrier commissions; networking products; tablets covering e-readers; smartwatches; and consumer electronics consisting of digital imaging, health and fitness products, portable audio comprising headphones and portable speakers, and smart home products, as well as home theaters, which includes home theater accessories, soundbars, and televisions. The company's stores also offer appliances, such as dishwashers, laundry, ovens, refrigerators, blenders, coffee makers, vacuums, and personal care; entertainment products consisting of drones, peripherals, movies, and toys, as well as hardware and software, and virtual reality and other software products; and other products, such as baby, food and beverage, luggage, outdoor living, and sporting goods. In addition, it provides delivery, installation, memberships, repair, set-up, technical support, health-related, and warranty-related services. The company offers its products through stores and websites under the Best Buy, Best Buy Ads, Best Buy Business, Best Buy Health, Buy Mobile, CST, Current Health, Geek Squad, Lively, Magnolia, Pacific Kitchen, Home, TechLiquidators, and Yardbird brands, as well as domain names comprising bestbuy.com, currenthealth.com, lively.com, techliquidators.com, yardbird.com, and bestbuy.ca. The company was formerly known as Sound of Music, Inc. Best Buy Co., Inc. was incorporated in 1966 and is headquartered in Richfield, Minnesota.