Gaia (NASDAQ: GAIA) and The Michaels Companies (NASDAQ:MIK) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.
This table compares Gaia and The Michaels Companies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|The Michaels Companies||7.29%||-22.53%||18.13%|
Insider and Institutional Ownership
31.4% of Gaia shares are owned by institutional investors. Comparatively, 98.4% of The Michaels Companies shares are owned by institutional investors. 42.8% of Gaia shares are owned by company insiders. Comparatively, 1.5% of The Michaels Companies shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Gaia and The Michaels Companies’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Gaia||$21.56 million||8.61||-$18.78 million||$5.59||2.19|
|The Michaels Companies||$5.21 billion||0.72||$801.02 million||$1.89||11.02|
The Michaels Companies has higher revenue and earnings than Gaia. Gaia is trading at a lower price-to-earnings ratio than The Michaels Companies, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Gaia has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, The Michaels Companies has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500.
This is a breakdown of current ratings and price targets for Gaia and The Michaels Companies, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The Michaels Companies||0||3||5||0||2.63|
Gaia presently has a consensus price target of $17.00, suggesting a potential upside of 38.78%. The Michaels Companies has a consensus price target of $24.29, suggesting a potential upside of 16.65%. Given Gaia’s stronger consensus rating and higher possible upside, analysts clearly believe Gaia is more favorable than The Michaels Companies.
Gaia beats The Michaels Companies on 8 of the 13 factors compared between the two stocks.
Gaia, Inc., formerly Gaiam, Inc., is engaged in providing global digital video subscription service. The Company is a global digital video streaming service and online community delivering curated media to its subscribers in over 120 countries. It provides its members access to approximately 7,000 video titles. Its video content is available to its subscribers through online digital streaming on virtually any Internet-connected device on a commercial-free basis. In addition to streaming, the Company’s subscribers can download its video content to their devices, so they can view its content without being actively connected to the Internet. Through the Gaia service, the Company’s subscribers have access to a library of inspiring films, personal growth-related content, documentaries, interviews, yoga classes and fitness. The Company has also created a fitness and yoga-focused version of its video service. The Company also operates a digital versatile disc (DVD) subscription club.
About The Michaels Companies
The Michaels Companies, Inc. (Michaels) is an arts and crafts specialty retailer in North America. The Company’s segments include Michaels-U.S., Michaels-Canada, Aaron Brothers, Pat Catan’s and Darice. As of January 28, 2017, the Company operated 1,223 Michaels retail stores in 49 states and Canada, with approximately 18,000 average square feet of selling space per store. It operated 109 Aaron Brothers stores in nine states, with approximately 5,500 average square feet of selling space and 35 Pat Catan’s stores in five states, with approximately 32,000 average square feet of selling space, as of January 28, 2017. The Company also operates an international wholesale business under the Darice brand name. The Company’s stores purchase custom frames, framing supplies and mats from its framing operation and subsidiary, Artistree, Inc. (Artistree), which consists of a manufacturing facility and four regional processing centers.
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