Comparing Michaels Companies (MIK) & Cabelas (NYSE:CAB)

Michaels Companies (NASDAQ: MIK) and Cabelas (NYSE:CAB) are both mid-cap retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, analyst recommendations, risk, dividends and valuation.

Insider and Institutional Ownership

56.9% of Cabelas shares are owned by institutional investors. 1.3% of Michaels Companies shares are owned by company insiders. Comparatively, 21.0% of Cabelas shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Michaels Companies and Cabelas, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Michaels Companies 1 3 4 0 2.38
Cabelas 0 4 1 0 2.20

Michaels Companies presently has a consensus price target of $23.86, suggesting a potential upside of 9.94%. Cabelas has a consensus price target of $61.50, suggesting a potential upside of 0.00%. Given Michaels Companies’ stronger consensus rating and higher possible upside, research analysts plainly believe Michaels Companies is more favorable than Cabelas.

Profitability

This table compares Michaels Companies and Cabelas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Michaels Companies 7.33% -22.16% 17.99%
Cabelas 3.18% 5.53% 1.32%

Earnings & Valuation

This table compares Michaels Companies and Cabelas’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Michaels Companies $5.20 billion 0.76 $378.15 million $1.96 11.07
Cabelas N/A N/A N/A $1.93 31.87

Michaels Companies has higher revenue and earnings than Cabelas. Michaels Companies is trading at a lower price-to-earnings ratio than Cabelas, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Michaels Companies has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, Cabelas has a beta of 0.14, suggesting that its stock price is 86% less volatile than the S&P 500.

Summary

Michaels Companies beats Cabelas on 8 of the 11 factors compared between the two stocks.

About 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.

About Cabelas

Cabela’s Incorporated is an omni-channel retailer of hunting, fishing, camping, shooting sports and related outdoor merchandise. The Company offers its customers a selection of national and regional brand products, including its Cabela’s brand. The Company’s segments include Merchandising and Financial Services. The Merchandising segment sells products and services through the Company’s retail stores, its e-commerce Websites (Cabelas.com and Cabelas.ca), and its catalogs. The United States merchandising and Canada merchandising operating segments have been aggregated into its Merchandising segment. The Financial Services segment issues co-branded credit cards, which are available through all of its channels. The Company’s product assortment includes merchandise and equipment for hunting, fishing, marine use, camping, and recreational sport shooting, along with casual and outdoor apparel and footwear, optics, vehicle accessories, and gifts and home furnishings with an outdoor theme.

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