Reviewing Nordstrom (JWN) & Its Peers

Nordstrom (NYSE: JWN) is one of 14 publicly-traded companies in the “Family clothing stores” industry, but how does it weigh in compared to its peers? We will compare Nordstrom to related businesses based on the strength of its dividends, earnings, valuation, analyst recommendations, profitability, institutional ownership and risk.

Profitability

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

Net Margins Return on Equity Return on Assets
Nordstrom 2.86% 60.72% 6.20%
Nordstrom Competitors 4.10% 17.57% 7.85%

Risk and Volatility

Nordstrom has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500. Comparatively, Nordstrom’s peers have a beta of 0.63, indicating that their average share price is 37% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Nordstrom and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nordstrom 1 13 5 0 2.21
Nordstrom Competitors 363 1819 1815 44 2.38

Nordstrom presently has a consensus target price of $49.31, indicating a potential upside of 2.58%. As a group, “Family clothing stores” companies have a potential downside of 0.93%. Given Nordstrom’s higher possible upside, research analysts plainly believe Nordstrom is more favorable than its peers.

Insider and Institutional Ownership

58.8% of Nordstrom shares are held by institutional investors. Comparatively, 63.8% of shares of all “Family clothing stores” companies are held by institutional investors. 7.3% of Nordstrom shares are held by insiders. Comparatively, 14.3% of shares of all “Family clothing stores” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Nordstrom pays an annual dividend of $1.48 per share and has a dividend yield of 3.1%. Nordstrom pays out 50.0% of its earnings in the form of a dividend. As a group, “Family clothing stores” companies pay a dividend yield of 2.0% and pay out 37.3% of their earnings in the form of a dividend.

Valuation and Earnings

This table compares Nordstrom and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Nordstrom $15.14 billion $437.00 million 16.24
Nordstrom Competitors $8.05 billion $540.81 million 45.30

Nordstrom has higher revenue, but lower earnings than its peers. Nordstrom is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Nordstrom peers beat Nordstrom on 10 of the 15 factors compared.

Nordstrom Company Profile

Nordstrom, Inc. is a fashion specialty retailer in the United States. The Company’s segments include Retail and Credit. As of March 20, 2017, the Company operated 344 the United States stores located in 40 states as well as an e-commerce business. The Company also offers its customers a variety of payment products and services, including credit and debit cards. As of March 20, 2017, the Retail segment included its 117 Nordstrom-branded full-line stores in the United States and Nordstrom.com, 216 off-price Nordstrom Rack stores, five Canada full-line stores, Nordstromrack.com/HauteLook, seven Trunk Club clubhouses and TrunkClub.com, two Jeffrey boutiques and two clearance stores that operate under the name Last Chance. The Company, through Credit segment, allows its customers to access a range of payment products and services, including a Nordstrom-branded private label card, approximately two Nordstrom-branded Visa credit cards and a debit card for Nordstrom purchases.

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