Staples (NASDAQ: SPLS) and Cabela’s (NYSE:CAB) are both mid-cap retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, earnings, institutional ownership, analyst recommendations, risk and dividends.

Dividends

Staples pays an annual dividend of $0.48 per share and has a dividend yield of 4.7%. Cabela’s does not pay a dividend. Staples pays out -20.4% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Staples and Cabela’s’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Staples $17.91 billion 0.38 $1.22 billion ($2.35) -4.36
Cabela’s $4.06 billion 1.04 $463.18 million $1.94 31.70

Staples has higher revenue and earnings than Cabela’s. Staples is trading at a lower price-to-earnings ratio than Cabela’s, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

85.6% of Staples shares are owned by institutional investors. Comparatively, 56.9% of Cabela’s shares are owned by institutional investors. 0.7% of Staples shares are owned by company insiders. Comparatively, 21.0% of Cabela’s shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Staples and Cabela’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Staples -8.53% 15.09% 6.94%
Cabela’s 3.29% 8.60% 1.98%

Risk & Volatility

Staples has a beta of 1.74, meaning that its stock price is 74% more volatile than the S&P 500. Comparatively, Cabela’s has a beta of 0.14, meaning that its stock price is 86% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Staples and Cabela’s, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Staples 0 5 1 0 2.17
Cabela’s 0 7 1 0 2.13

Staples currently has a consensus target price of $8.85, indicating a potential downside of 13.66%. Cabela’s has a consensus target price of $65.10, indicating a potential upside of 5.86%. Given Cabela’s’ higher probable upside, analysts plainly believe Cabela’s is more favorable than Staples.

Summary

Staples beats Cabela’s on 9 of the 14 factors compared between the two stocks.

About Staples

Staples, Inc. (Staples) is a provider of products and services that serve the needs of business customers and consumers. The Company offers a range of print and marketing and technology services. The Company’s segments include North American Delivery, North American Retail and Other. The North American Delivery segment consists of the United States and Canadian businesses, including Staples Business Advantage, staples.com, staples.ca, and quill.com, that sell and deliver products and services primarily to businesses. The North American Retail segment includes its retail stores in the United States and Canada. As of January 28, 2017, its North American Retail segment consisted of 1,255 stores in the United States and 304 stores in Canada. The Company has other businesses in Australia, South America and Asia. Staples Australia serves primarily contract and government customers in Australia and New Zealand. The Company also has operations in China, Argentina, Taiwan and Brazil.

About Cabela’s

Cabela’s Incorporated is an omni-channel retailer of hunting, fishing, camping, shooting sports and related outdoor merchandise. The Company offers its customers a selection of national and regional brand products, including its Cabela’s brand. The Company’s segments include Merchandising and Financial Services. The Merchandising segment sells products and services through the Company’s retail stores, its e-commerce Websites (Cabelas.com and Cabelas.ca), and its catalogs. The United States merchandising and Canada merchandising operating segments have been aggregated into its Merchandising segment. The Financial Services segment issues co-branded credit cards, which are available through all of its channels. The Company’s product assortment includes merchandise and equipment for hunting, fishing, marine use, camping, and recreational sport shooting, along with casual and outdoor apparel and footwear, optics, vehicle accessories, and gifts and home furnishings with an outdoor theme.

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