Pier 1 Imports (NYSE: PIR) and Bed Bath & Beyond (NASDAQ:BBBY) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, risk, earnings, valuation and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Pier 1 Imports and Bed Bath & Beyond, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pier 1 Imports 4 11 2 0 1.88
Bed Bath & Beyond 8 12 1 0 1.67

Pier 1 Imports presently has a consensus target price of $5.90, suggesting a potential upside of 46.04%. Bed Bath & Beyond has a consensus target price of $35.38, suggesting a potential upside of 29.72%. Given Pier 1 Imports’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Pier 1 Imports is more favorable than Bed Bath & Beyond.

Risk & Volatility

Pier 1 Imports has a beta of 1.7, suggesting that its stock price is 70% more volatile than the S&P 500. Comparatively, Bed Bath & Beyond has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500.

Profitability

This table compares Pier 1 Imports and Bed Bath & Beyond’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pier 1 Imports 1.82% 13.96% 4.53%
Bed Bath & Beyond 5.22% 24.38% 9.34%

Valuation & Earnings

This table compares Pier 1 Imports and Bed Bath & Beyond’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pier 1 Imports $1.82 billion 0.18 $134.14 million $0.41 9.85
Bed Bath & Beyond $12.22 billion 0.31 $1.36 billion $4.33 6.30

Bed Bath & Beyond has higher revenue and earnings than Pier 1 Imports. Bed Bath & Beyond is trading at a lower price-to-earnings ratio than Pier 1 Imports, indicating that it is currently the more affordable of the two stocks.

Dividends

Pier 1 Imports pays an annual dividend of $0.28 per share and has a dividend yield of 6.9%. Bed Bath & Beyond pays an annual dividend of $0.60 per share and has a dividend yield of 2.2%. Pier 1 Imports pays out 68.3% of its earnings in the form of a dividend. Bed Bath & Beyond pays out 13.9% 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. Bed Bath & Beyond has raised its dividend for 4 consecutive years.

Insider & Institutional Ownership

86.2% of Pier 1 Imports shares are owned by institutional investors. Comparatively, 91.5% of Bed Bath & Beyond shares are owned by institutional investors. 5.6% of Pier 1 Imports shares are owned by insiders. Comparatively, 5.0% of Bed Bath & Beyond shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Bed Bath & Beyond beats Pier 1 Imports on 10 of the 17 factors compared between the two stocks.

Pier 1 Imports Company Profile

Pier 1 Imports, Inc. is an importer of home decor and furniture. The Company’s operations consist of retail stores and an e-commerce Website conducting business under the name Pier 1 Imports, which sells a range of decorative accessories, furniture, candles, housewares, gifts and seasonal products. The Company’s categories of merchandise include decorative accessories and furniture. The decorative accessories category includes decorative accents and textiles, such as rugs, wall decorations and mirrors, candles, fragrance, gifts and seasonal items. The furniture category includes furniture and furniture cushions to be used in living, dining, office, sunrooms and patios. This merchandise group is generally made of metal or handcrafted natural materials, including rattan, pine, acacia, oak and other woods with either natural, stained, painted or upholstered finishes.

Bed Bath & Beyond Company Profile

Bed Bath & Beyond Inc. is a retailer, which operates under the names Bed Bath & Beyond (BBB), Christmas Tree Shops, Christmas Tree Shops andThat! or andThat! (collectively, CTS), Harmon or Harmon Face Values (collectively, Harmon), buybuy BABY (Baby) and World Market, Cost Plus World Market or Cost Plus (collectively, Cost Plus World Market). The Company operates in two segments: North American Retail and Institutional Sales. The Company sells a range of domestics merchandise and home furnishings. Domestics merchandise includes categories, such as bed linens and related items, bath items and kitchen textiles. Home furnishings include categories, such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables and juvenile products. The Company operates approximately 1,530 stores plus its various Websites, other interactive platforms and distribution facilities.

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