Financial Review: Big 5 Sporting Goods (BGFV) versus Barnes & Noble Education (BNED)

Big 5 Sporting Goods (NASDAQ: BGFV) and Barnes & Noble Education (NYSE:BNED) are both small-cap retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, profitability, institutional ownership, valuation and risk.

Insider and Institutional Ownership

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92.4% of Big 5 Sporting Goods shares are held by institutional investors. Comparatively, 69.2% of Barnes & Noble Education shares are held by institutional investors. 7.9% of Big 5 Sporting Goods shares are held by company insiders. Comparatively, 3.5% of Barnes & Noble Education shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations for Big 5 Sporting Goods and Barnes & Noble Education, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Big 5 Sporting Goods 0 2 0 0 2.00
Barnes & Noble Education 0 0 2 0 3.00

Big 5 Sporting Goods currently has a consensus target price of $9.00, indicating a potential upside of 23.29%. Barnes & Noble Education has a consensus target price of $12.00, indicating a potential upside of 70.70%. Given Barnes & Noble Education’s stronger consensus rating and higher probable upside, analysts clearly believe Barnes & Noble Education is more favorable than Big 5 Sporting Goods.

Profitability

This table compares Big 5 Sporting Goods and Barnes & Noble Education’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Big 5 Sporting Goods 0.11% 5.97% 2.70%
Barnes & Noble Education -12.31% -41.88% -18.50%

Valuation and Earnings

This table compares Big 5 Sporting Goods and Barnes & Noble Education’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Big 5 Sporting Goods $1.01 billion 0.15 $1.10 million $0.57 12.81
Barnes & Noble Education $1.87 billion 0.18 $5.36 million $0.11 63.91

Barnes & Noble Education has higher revenue and earnings than Big 5 Sporting Goods. Big 5 Sporting Goods is trading at a lower price-to-earnings ratio than Barnes & Noble Education, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Big 5 Sporting Goods has a beta of -0.61, indicating that its stock price is 161% less volatile than the S&P 500. Comparatively, Barnes & Noble Education has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500.

Dividends

Big 5 Sporting Goods pays an annual dividend of $0.60 per share and has a dividend yield of 8.2%. Barnes & Noble Education does not pay a dividend. Big 5 Sporting Goods pays out 105.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Barnes & Noble Education beats Big 5 Sporting Goods on 9 of the 16 factors compared between the two stocks.

Big 5 Sporting Goods Company Profile

Big 5 Sporting Goods Corporation operates as a sporting goods retailer in the western United States. The company offers athletic shoes, apparel, and accessories, as well as a selection of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, winter and summer recreation, and roller sports. It also provides private label items, such as shoes, apparel, camping equipment, fishing supplies, and snow sport equipment. The company sells private label merchandise under its own trademarks comprising Golden Bear, Harsh, Pacifica, and Rugged Exposure; and licensed trademarks, including Beach Feet, Bearpaw, Body Glove, Morrow, and The Realm. As of December 31, 2017, it operated 435 stores and an e-commerce platform under the Big 5 Sporting Goods name. Big 5 Sporting Goods Corporation was founded in 1955 and is headquartered in El Segundo, California.

Barnes & Noble Education Company Profile

Barnes & Noble Education, Inc. operates bookstores for college and university campuses, and private/parochial K-12 schools in the United States. The company operates in two segments, Barnes & Noble College and MBS Textbook Exchange. The Barnes & Noble College segment sells and rents course material; offers a suite of digital content, software, and services through its LoudCloud platform, as well as etextbooks; and sells general merchandise, including collegiate and athletic apparel, other custom-branded school spirit products, technology, supplies, and convenience items. It also operates 83 customized cafés and 17 stand-alone convenience stores; and a media channel for brands targeting the college demographic. As of April 29, 2017, this segment operated 769 physical bookstores; and 61 True Spirit sites. The MBS Textbook Exchange segment is involved in the operation of virtual bookstores, which offer course materials, including new and used print and digital textbooks; and textbook distribution activities, as well as sale of inventory management, hardware, and point-of-sale software. It also provides digital suite of course materials and platforms; new, used, and digital textbooks online; and digital content. This segment operates 712 virtual bookstores, including 454 virtual stores at K-12 schools; and textbooks.com. Barnes & Noble Education, Inc. was founded in 1873 and is based in Basking Ridge, New Jersey.

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