PriceSmart (PSMT) vs. Ollie's Bargain Outlet (OLLI) Critical Comparison

PriceSmart (NASDAQ: PSMT) and Ollie's Bargain Outlet (NASDAQ:OLLI) are both mid-cap retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, risk and profitability.

Risk and Volatility

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PriceSmart has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, Ollie's Bargain Outlet has a beta of 0.14, meaning that its share price is 86% less volatile than the S&P 500.

Profitability

This table compares PriceSmart and Ollie's Bargain Outlet’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PriceSmart 2.45% 12.38% 7.44%
Ollie's Bargain Outlet 11.85% 11.23% 7.86%

Earnings & Valuation

This table compares PriceSmart and Ollie's Bargain Outlet’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PriceSmart $3.00 billion 0.90 $90.72 million $2.98 29.61
Ollie's Bargain Outlet $1.08 billion 3.40 $59.76 million $1.25 47.16

PriceSmart has higher revenue and earnings than Ollie's Bargain Outlet. PriceSmart is trading at a lower price-to-earnings ratio than Ollie's Bargain Outlet, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

77.3% of PriceSmart shares are held by institutional investors. Comparatively, 91.8% of Ollie's Bargain Outlet shares are held by institutional investors. 28.0% of PriceSmart shares are held by company insiders. Comparatively, 22.3% of Ollie's Bargain Outlet shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

PriceSmart pays an annual dividend of $0.70 per share and has a dividend yield of 0.8%. Ollie's Bargain Outlet does not pay a dividend. PriceSmart pays out 23.5% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for PriceSmart and Ollie's Bargain Outlet, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PriceSmart 0 3 2 0 2.40
Ollie's Bargain Outlet 1 6 6 0 2.38

PriceSmart presently has a consensus price target of $91.67, suggesting a potential upside of 3.90%. Ollie's Bargain Outlet has a consensus price target of $55.83, suggesting a potential downside of 5.29%. Given PriceSmart’s stronger consensus rating and higher probable upside, equities research analysts plainly believe PriceSmart is more favorable than Ollie's Bargain Outlet.

Summary

PriceSmart beats Ollie's Bargain Outlet on 9 of the 16 factors compared between the two stocks.

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.

About Ollie's Bargain Outlet

Ollie’s Bargain Outlet Holdings, Inc. is a retailer of brand name merchandise. The Company offers customers a selection of brand name products, including food, housewares, books and stationery, bed and bath, floor coverings, electronics and toys. Its warehouse format stores feature a range of products, including hardware, personal healthcare, candy, clothing, sporting goods, pet and lawn and garden products. It offers cooking utensils, dishes, appliances, plastic containers, coffee, bottled non-carbonated beverages, coffee, bottled non-carbonated beverages, bedding, towels, curtains, laminate flooring, commercial and residential carpeting, air conditioners, home electronics, cellular accessories, dolls, action figures, puzzles, action figures, puzzles, educational toys, board games, luggage, automotive, seasonal, furniture, summer furniture and lawn and garden. As of January 28, 2017, it had operated 234 stores across 19 contiguous states in the Eastern half of the United States.

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