Head-To-Head Review: PriceSmart (PSMT) versus Its Peers

PriceSmart (NASDAQ: PSMT) is one of 12 publicly-traded companies in the “Variety stores” industry, but how does it weigh in compared to its peers? We will compare PriceSmart to related businesses based on the strength of its analyst recommendations, institutional ownership, valuation, risk, profitability, dividends and earnings.

Dividends

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PriceSmart pays an annual dividend of $0.70 per share and has a dividend yield of 0.8%. PriceSmart pays out 23.5% of its earnings in the form of a dividend. As a group, “Variety stores” companies pay a dividend yield of 1.6% and pay out 36.2% of their earnings in the form of a dividend.

Institutional and Insider Ownership

77.3% of PriceSmart shares are owned by institutional investors. Comparatively, 76.5% of shares of all “Variety stores” companies are owned by institutional investors. 28.0% of PriceSmart shares are owned by insiders. Comparatively, 13.9% of shares of all “Variety stores” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares PriceSmart and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PriceSmart 2.92% 12.61% 7.52%
PriceSmart Competitors 3.80% 15.06% 6.65%

Analyst Ratings

This is a breakdown of recent recommendations for PriceSmart and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PriceSmart 0 3 2 0 2.40
PriceSmart Competitors 163 1262 1690 90 2.53

PriceSmart presently has a consensus target price of $91.67, indicating a potential upside of 3.91%. As a group, “Variety stores” companies have a potential upside of 6.17%. Given PriceSmart’s peers stronger consensus rating and higher possible upside, analysts clearly believe PriceSmart has less favorable growth aspects than its peers.

Earnings and Valuation

This table compares PriceSmart and its peers top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
PriceSmart $3.00 billion $90.72 million 29.60
PriceSmart Competitors $65.63 billion $1.74 billion 21.29

PriceSmart’s peers have higher revenue and earnings than PriceSmart. PriceSmart is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Risk and Volatility

PriceSmart has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, PriceSmart’s peers have a beta of 0.89, meaning that their average share price is 11% less volatile than the S&P 500.

Summary

PriceSmart peers beat PriceSmart on 9 of the 15 factors compared.

About PriceSmart

PriceSmart, Inc. owns and operates the U.S.-style membership shopping warehouse clubs in Latin America and the Caribbean. The company's warehouse clubs offer brand name and private label consumer goods to individuals and businesses. As of October 26, 2017, it operated 40 warehouse clubs comprising 7 each in Colombia and Costa Rica; 5 in Panama; 4 in Trinidad; 3 each in Guatemala, Honduras, and the Dominican Republic; 2 in El Salvador and Nicaragua; and 1 each in Aruba, Barbados, Jamaica, and the United States Virgin Islands. PriceSmart, Inc. was founded in 1994 and is headquartered in San Diego, California.

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