Critical Analysis: Dicks Sporting Goods (DKS) & Hibbett Sports (HIBB)

Dicks Sporting Goods (NYSE: DKS) and Hibbett Sports (NASDAQ:HIBB) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Risk & Volatility

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Dicks Sporting Goods has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500. Comparatively, Hibbett Sports has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Valuation and Earnings

This table compares Dicks Sporting Goods and Hibbett Sports’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dicks Sporting Goods $8.59 billion 0.42 $323.44 million $3.01 11.22
Hibbett Sports $968.22 million 0.52 $35.03 million $1.63 16.13

Dicks Sporting Goods has higher revenue and earnings than Hibbett Sports. Dicks Sporting Goods is trading at a lower price-to-earnings ratio than Hibbett Sports, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Dicks Sporting Goods and Hibbett Sports, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dicks Sporting Goods 2 15 12 0 2.34
Hibbett Sports 2 9 6 0 2.24

Dicks Sporting Goods presently has a consensus target price of $35.08, suggesting a potential upside of 3.92%. Hibbett Sports has a consensus target price of $21.58, suggesting a potential downside of 17.96%. Given Dicks Sporting Goods’ stronger consensus rating and higher possible upside, equities analysts plainly believe Dicks Sporting Goods is more favorable than Hibbett Sports.

Profitability

This table compares Dicks Sporting Goods and Hibbett Sports’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dicks Sporting Goods 3.77% 16.86% 7.32%
Hibbett Sports 3.62% 10.37% 7.29%

Dividends

Dicks Sporting Goods pays an annual dividend of $0.90 per share and has a dividend yield of 2.7%. Hibbett Sports does not pay a dividend. Dicks Sporting Goods pays out 29.9% of its earnings in the form of a dividend. Dicks Sporting Goods has raised its dividend for 3 consecutive years.

Institutional and Insider Ownership

71.3% of Dicks Sporting Goods shares are owned by institutional investors. 23.1% of Dicks Sporting Goods shares are owned by company insiders. Comparatively, 1.6% of Hibbett Sports shares are owned 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.

Summary

Dicks Sporting Goods beats Hibbett Sports on 13 of the 17 factors compared between the two stocks.

Dicks Sporting Goods Company Profile

Dick's Sporting Goods, Inc. operates as a sporting goods retailer primarily in the eastern United States. It provides hardlines, including sporting goods equipment, fitness equipment, golf equipment, and hunting and fishing gear products; apparel; and footwear products and accessories. The company also owns and operates Golf Galaxy, Field & Stream and other specialty concept stores; and e-commerce Websites, as well as Dick's Team Sports HQ, a youth sports digital platform that offers free league management services, mobile apps for scheduling, communications and live scorekeeping, custom uniforms and fan wear, and access to donations and sponsorships. As of October 28, 2017, it operated approximately 715 DICK'S Sporting Goods locations in the United States. The company was formerly known as Dick's Clothing and Sporting Goods, Inc. and changed its name to Dick's Sporting Goods, Inc. in April 1999. Dick's Sporting Goods, Inc. was founded in 1948 and is headquartered in Coraopolis, Pennsylvania.

Hibbett Sports Company Profile

Hibbett Sports, Inc., together with its subsidiaries, operates athletic specialty stores in small and mid-sized markets primarily in the South, Southwest, Mid-Atlantic, and the Midwest regions of the United States. Its stores offer a range of merchandise, including athletic footwear, team sports equipment, athletic and fashion apparel, and related accessories. The company also sells merchandise directly to educational institutions and youth associations. As of January 28, 2017, it operated 1,059 Hibbett Sports stores and 19 Sports Additions athletic shoe stores. Hibbett Sports, Inc. was founded in 1945 and is based in Birmingham, Alabama.

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