Family Dollar Stores (NYSE: FDO) and Target Corporation (NYSE:TGT) are both cyclical consumer goods & services companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, risk, dividends, earnings and analyst recommendations.
Insider & Institutional Ownership
83.2% of Target Corporation shares are held by institutional investors. 0.3% of Target Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Target Corporation pays an annual dividend of $2.48 per share and has a dividend yield of 4.1%. Family Dollar Stores does not pay a dividend. Target Corporation pays out 50.0% of its earnings in the form of a dividend. Family Dollar Stores has raised its dividend for 49 consecutive years.
This is a summary of current ratings and recommmendations for Family Dollar Stores and Target Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Family Dollar Stores||0||0||0||0||N/A|
Target Corporation has a consensus price target of $63.67, indicating a potential upside of 5.78%. Given Target Corporation’s higher possible upside, analysts clearly believe Target Corporation is more favorable than Family Dollar Stores.
Valuation and Earnings
This table compares Family Dollar Stores and Target Corporation’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Family Dollar Stores||N/A||N/A||N/A||N/A||N/A|
|Target Corporation||$69.58 billion||0.47||$7.14 billion||$4.96||12.14|
Target Corporation has higher revenue and earnings than Family Dollar Stores.
This table compares Family Dollar Stores and Target Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Family Dollar Stores||2.93%||17.69%||8.08%|
Target Corporation beats Family Dollar Stores on 8 of the 11 factors compared between the two stocks.
Family Dollar Stores Company Profile
Family Dollar Stores, Inc. operates a chain of retail stores. The Company offers a range of merchandise for the whole family, ranging from household cleaners to name brand foods, from health and beauty aids to toys, and from apparel for every age to home fashions. The Company has approximately 10 distribution centers for its supply chain management. The Company has over 8,000 stores within its approximately 50 state operating area. The Company’s subsidiary, Family Dollar Trucking, Inc., services Family Dollar Stores located in southeastern states with localized operations at the corporate fleet offices. The Company offers various categories of products, such as food and beverages, household products, family apparel, personal beauty and care, pet supplies, home decor, electronics, baby care, automotive, hardware, health and wellness, mobile phones, candy, toys and outdoor. The Company’s other product categories include Halloween, Game Day, Holiday, Valentine’s Day and Easter.
Target Corporation Company Profile
Target Corporation (Target) is a general merchandise retailer selling products through its stores and digital channels. Its general merchandise stores offer an edited food assortment, including perishables, dry grocery, dairy and frozen items. Its digital channels include a range of general merchandise, including a range of items found in its stores, along with an assortment, such as additional sizes and colors sold only online. Its owned brands include Archer Farms, Market Pantry, Sutton & Dodge, Art Class, Merona, Threshold, Ava & Viv, Pillowfort, Room Essentials, Wine Cube, Cat & Jack, Simply Balanced and Wondershop. Its exclusive brands include C9 by Champion, Hand Made Modern, Mossimo, DENIZEN from Levi’s, Nate Berkus for Target, Fieldcrest, Kid Made Modern, Genuine Kids from OshKosh and Liz Lange for Target. As of January 28, 2017, the Company had 1,802 stores across the United States, including 1,535 owned stores, 107 leased stores and 160 owned buildings on leased land.
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