Financial Contrast: Big 5 Sporting Goods Corporation (BGFV) and Dick’s Sporting Goods (DKS)

Dick’s Sporting Goods (NYSE: DKS) and Big 5 Sporting Goods Corporation (NASDAQ:BGFV) are both retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, profitabiliy, earnings, dividends, valuation, risk and institutional ownership.

Risk & Volatility

Dick’s Sporting Goods has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500. Comparatively, Big 5 Sporting Goods Corporation has a beta of 0.03, meaning that its share price is 97% less volatile than the S&P 500.

Valuation & Earnings

This table compares Dick’s Sporting Goods and Big 5 Sporting Goods Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Dick’s Sporting Goods $8.09 billion 0.56 $724.69 million $2.59 15.68
Big 5 Sporting Goods Corporation $1.04 billion 0.30 $56.81 million $1.07 13.22

Dick’s Sporting Goods has higher revenue and earnings than Big 5 Sporting Goods Corporation. Big 5 Sporting Goods Corporation is trading at a lower price-to-earnings ratio than Dick’s Sporting Goods, indicating that it is currently the more affordable of the two stocks.

Dividends

Dick’s Sporting Goods pays an annual dividend of $0.68 per share and has a dividend yield of 1.7%. Big 5 Sporting Goods Corporation pays an annual dividend of $0.60 per share and has a dividend yield of 4.2%. Dick’s Sporting Goods pays out 26.3% of its earnings in the form of a dividend. Big 5 Sporting Goods Corporation pays out 56.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Dick’s Sporting Goods has increased its dividend for 2 consecutive years.

Profitability

This table compares Dick’s Sporting Goods and Big 5 Sporting Goods Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dick’s Sporting Goods 3.57% 18.61% 8.43%
Big 5 Sporting Goods Corporation 2.24% 11.82% 5.50%

Analyst Recommendations

This is a breakdown of current recommendations for Dick’s Sporting Goods and Big 5 Sporting Goods Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dick’s Sporting Goods 1 8 20 0 2.66
Big 5 Sporting Goods Corporation 0 1 1 0 2.50

Dick’s Sporting Goods currently has a consensus target price of $57.73, indicating a potential upside of 42.16%. Big 5 Sporting Goods Corporation has a consensus target price of $17.00, indicating a potential upside of 20.14%. Given Dick’s Sporting Goods’ stronger consensus rating and higher possible upside, research analysts plainly believe Dick’s Sporting Goods is more favorable than Big 5 Sporting Goods Corporation.

Insider & Institutional Ownership

79.8% of Dick’s Sporting Goods shares are owned by institutional investors. Comparatively, 80.7% of Big 5 Sporting Goods Corporation shares are owned by institutional investors. 23.0% of Dick’s Sporting Goods shares are owned by company insiders. Comparatively, 7.9% of Big 5 Sporting Goods Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Dick’s Sporting Goods beats Big 5 Sporting Goods Corporation on 15 of the 17 factors compared between the two stocks.

Dick’s Sporting Goods Company Profile

Dick’s Sporting Goods, Inc. is an omni-channel sporting goods retailer offering an assortment of sports equipment, apparel, footwear and accessories in its specialty retail stores primarily in the eastern United States. The Company also owns and operates Golf Galaxy, Field & Stream and other specialty concept stores, and Dick’s Team Sports HQ, an all-in-one youth sports digital platform offering free league management services, mobile applications for scheduling, communications and live scorekeeping, custom uniforms and FanWear and access to donations and sponsorships. The Company offers its products through a content-rich e-commerce platform that is integrated with its store network and provides customers with the convenience and expertise of a 24-hour storefront. It offers products to its customers through its retail stores and online. The Company offers hardlines, which include items, such as sporting goods equipment, fitness equipment, golf equipment, and hunting and fishing gear.

Big 5 Sporting Goods Corporation Company Profile

Big 5 Sporting Goods Corporation is a sporting goods retailer in the western United States. The Company offers a range of products in a sporting goods store format. The Company also offers products online through its e-commerce platform. The Company’s product mix includes athletic shoes, apparel and accessories, as well as a range of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, winter and summer recreation, and roller sports. The Company purchases merchandise from sporting goods equipment, athletic footwear and apparel manufacturers. It offers various brands, such as adidas, Coleman, Footjoy, JanSport, Rawlings, Spalding, Asics, Columbia, Franklin, Lifetime, Razor, Speedo, Bearpaw, Crocs, Gildan, Mizuno, Rollerblade and Timex. The Company operated 432 stores and an e-commerce platform under the name Big 5 Sporting Goods, as of January 1, 2017.

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