Financial Contrast: Burlington (BURL) versus J C Penney (JCP)

Burlington (NYSE: BURL) and J C Penney (NYSE:JCP) are both retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Profitability

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This table compares Burlington and J C Penney’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Burlington 6.31% -754.89% 11.19%
J C Penney -0.93% 5.65% 0.80%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Burlington and J C Penney, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Burlington 0 0 15 0 3.00
J C Penney 2 17 0 0 1.89

Burlington currently has a consensus price target of $133.33, indicating a potential downside of 2.15%. J C Penney has a consensus price target of $4.18, indicating a potential upside of 37.61%. Given J C Penney’s higher probable upside, analysts plainly believe J C Penney is more favorable than Burlington.

Institutional & Insider Ownership

74.5% of J C Penney shares are held by institutional investors. 1.9% of Burlington shares are held by company insiders. Comparatively, 1.5% of J C Penney shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Burlington and J C Penney’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Burlington $6.11 billion 1.52 $384.85 million $4.37 31.18
J C Penney $12.51 billion 0.08 -$116.00 million $0.22 13.82

Burlington has higher earnings, but lower revenue than J C Penney. J C Penney is trading at a lower price-to-earnings ratio than Burlington, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Burlington has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500. Comparatively, J C Penney has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500.

Summary

Burlington beats J C Penney on 9 of the 14 factors compared between the two stocks.

About Burlington

Burlington Stores, Inc. operates as a retailer of branded apparel products in the United States. The company offers fashion-focused merchandise, including ladies sportswear, menswear, youth apparel, baby furniture, footwear, accessories, home décor and gifts, and coats. It operates 629 stores, including an Internet store in 45 states and Puerto Rico. Burlington Stores, Inc. was founded in 1972 and is headquartered in Burlington, New Jersey.

About J C Penney

J. C. Penney Company, Inc. is a holding company. The Company’s business consists of selling merchandise and services to consumers through its department stores and its Website at jcpenney.com. Its department stores and Website generally serve the same type of customers, its Website offers virtually the same mix of merchandise as its store assortment and other categories, and its department stores generally accept returns from sales made in stores and through its Website. It fulfills online customer purchases by direct shipment to the customer from its distribution facilities and stores or from its suppliers’ warehouses and by in store customer pick up. The Company sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products through Sephora inside JCPenney, home furnishings and appliances. In addition, its department stores provide its customers with services, such as styling salon, optical, portrait photography and custom decorating.

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