Head-To-Head Analysis: Macy’s (NYSE:M) versus LY (OTCMKTS:YAHOY)

Macy’s (NYSE:M) and LY (OTCMKTS:YAHOY) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations for Macy’s and LY, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Macy’s	2	8	3	0	2.08
LY	0	2	0	0	2.00

Macy’s currently has a consensus price target of $22.78, suggesting a potential upside of 0.30%. Given Macy’s’ stronger consensus rating and higher possible upside, equities analysts clearly believe Macy’s is more favorable than LY.

Dividends

Macy’s pays an annual dividend of $0.77 per share and has a dividend yield of 3.4%. LY pays an annual dividend of $0.10 per share and has a dividend yield of 1.5%. Macy’s pays out 28.2% of its earnings in the form of a dividend. LY pays out 25.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Macy’s has increased its dividend for 4 consecutive years. Macy’s is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Macy’s and LY’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Macy’s	3.29%	13.21%	3.83%
LY	6.24%	5.49%	1.80%

Earnings & Valuation

This table compares Macy’s and LY”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Macy’s	$22.62 billion	0.26	$642.00 million	$2.73	8.32
LY	$13.53 billion	1.66	$1.28 billion	$0.39	16.68

LY has lower revenue, but higher earnings than Macy’s. Macy’s is trading at a lower price-to-earnings ratio than LY, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

87.4% of Macy’s shares are held by institutional investors. 1.1% of Macy’s shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

Macy’s has a beta of 1.44, indicating that its share price is 44% more volatile than the S&P 500. Comparatively, LY has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500.

Summary

Macy’s beats LY on 12 of the 17 factors compared between the two stocks.

About Macy’s

Macy’s, Inc. engages in the retail of apparel, accessories, cosmetics, home furnishings, and other consumer goods. The firm’s brands include Macy’s, Bloomingdale’s, and Bluemercury. It offers men’s, women’s, and children’s apparel, women’s accessories, intimate apparel, shoes, cosmetics, fragrances, as well as home and miscellaneous products. The company was founded by Rowland H. Macy in 1858 and is headquartered in New York, NY.

About LY

LY Corporation engages in the online advertising and e-commerce businesses in Japan. The company provides LINE, a communication app; and Yahoo! JAPAN, an internet service that offers search, news, weather, shopping, auction, and other services. It also offers reuse, membership, and payment-related services. The company was formerly known as Z Holdings Corporation and changed its name to LY Corporation in October 2023. LY Corporation was founded in 1996 and is headquartered in Chiyoda, Japan. LY Corporation operates as a subsidiary of A Holdings Corporation.