Macy’s (NYSE:M) and J. C. Penney (OTCMKTS:JCPNQ) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, dividends and analyst recommendations.
Insider & Institutional Ownership
90.3% of Macy’s shares are owned by institutional investors. Comparatively, 57.1% of J. C. Penney shares are owned by institutional investors. 0.6% of Macy’s shares are owned by insiders. Comparatively, 3.0% of J. C. Penney shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This table compares Macy’s and J. C. Penney’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Macy’s||$24.56 billion||0.09||$564.00 million||$2.91||2.36|
|J. C. Penney||$11.17 billion||0.01||-$268.00 million||($0.80)||-0.42|
Macy’s has higher revenue and earnings than J. C. Penney. J. C. Penney is trading at a lower price-to-earnings ratio than Macy’s, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent recommendations for Macy’s and J. C. Penney, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|J. C. Penney||0||0||0||0||N/A|
Macy’s currently has a consensus target price of $9.73, indicating a potential upside of 41.44%. Given Macy’s’ higher probable upside, analysts plainly believe Macy’s is more favorable than J. C. Penney.
This table compares Macy’s and J. C. Penney’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|J. C. Penney||-2.40%||-27.83%||-3.09%|
Risk and Volatility
Macy’s has a beta of 1.54, indicating that its stock price is 54% more volatile than the S&P 500. Comparatively, J. C. Penney has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500.
Macy’s beats J. C. Penney on 11 of the 13 factors compared between the two stocks.
Macy's, Inc., an omnichannel retail organization, operates stores, Websites, and mobile applications. The company sells a range of merchandise, including apparel and accessories for men, women, and children; cosmetics; home furnishings; and other consumer goods. As of April 1, 2019, it operated approximately 680 department stores under the Macy's and Bloomingdale's names; and 190 specialty stores, such as Bloomingdale's The Outlet, Bluemercury, Macy's Backstage, and STORY in 43 states, the District of Columbia, Guam, and Puerto Rico. It also operated macys.com, bloomingdales.com, and bluemercury.com. In addition, the company offers licenses for its stores; and operates a beauty products and spa retailer under the bluemercury name. The company was formerly known as Federated Department Stores, Inc. and changed its name to Macy's, Inc. in June 2007. Macy's, Inc. was founded in 1830 and is based in Cincinnati, Ohio.
About J. C. Penney
J. C. Penney Company, Inc., through its subsidiary J. C. Penney Corporation, Inc., sells merchandise through department stores. The company primarily sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products, and home furnishings; and provides services, including styling salon, optical, portrait photography, and custom decorating services. As of March 31, 2020, it operated approximately 850 stores in the United States and Puerto Rico. The company also sells its products through its Website, jcpenney.com. The company was founded in 1902 and is based in Plano, Texas. On May 15, 2020, J. C. Penney Company, Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas.
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