Dillard’s (NYSE: DDS) and The Bon-Ton Stores (OTCMKTS:BONT) are both small-cap retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, institutional ownership, valuation, dividends, earnings and profitability.

Analyst Recommendations

This is a summary of recent ratings and target prices for Dillard’s and The Bon-Ton Stores, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dillard’s 2 2 0 0 1.50
The Bon-Ton Stores 0 0 0 0 N/A

Dillard’s presently has a consensus target price of $48.25, suggesting a potential downside of 13.19%. Given Dillard’s’ higher possible upside, equities analysts clearly believe Dillard’s is more favorable than The Bon-Ton Stores.

Risk & Volatility

Dillard’s has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500. Comparatively, The Bon-Ton Stores has a beta of 3.33, indicating that its stock price is 233% more volatile than the S&P 500.

Valuation and Earnings

This table compares Dillard’s and The Bon-Ton Stores’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Dillard’s $6.42 billion 0.25 $169.22 million $3.76 14.78
The Bon-Ton Stores $2.67 billion 0.00 -$63.41 million ($4.60) -0.09

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

Institutional and Insider Ownership

93.1% of Dillard’s shares are held by institutional investors. Comparatively, 19.1% of The Bon-Ton Stores shares are held by institutional investors. 23.3% of Dillard’s shares are held by company insiders. Comparatively, 45.7% of The Bon-Ton Stores shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Dillard’s pays an annual dividend of $0.40 per share and has a dividend yield of 0.7%. The Bon-Ton Stores does not pay a dividend. Dillard’s pays out 10.6% of its earnings in the form of a dividend. Dillard’s has raised its dividend for 3 consecutive years.

Profitability

This table compares Dillard’s and The Bon-Ton Stores’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dillard’s 1.92% 7.40% 3.08%
The Bon-Ton Stores -3.57% N/A -5.09%

Summary

Dillard’s beats The Bon-Ton Stores on 11 of the 14 factors compared between the two stocks.

Dillard’s Company Profile

Dillard’s, Inc. is a retailer of fashion apparel, cosmetics and home furnishing. As of January 28, 2017, the Company operated 293 Dillard’s stores, including 25 clearance centers, and an Internet store offering a selection of merchandise, including fashion apparel for women, men and children, accessories, cosmetics, home furnishings and other consumer goods. The Company’s segments include the Retail operations segment and the Construction segment. The Retail operations segment includes the operation of the Company’s retail department stores. The Construction segment includes the operations of CDI Contractors, LLC (CDI), a general contracting construction company. CDI’s business includes constructing and remodeling stores for the Company. As of January 28, 2017, the Company operated retail department stores in 29 states, primarily in the southwest, southeast and midwest regions of the United States.

The Bon-Ton Stores Company Profile

The Bon-Ton Stores, Inc. is a department store operator. The Company operates through two segments: stores and eCommerce (its Internet Websites). The Company offers a range of brand-name fashion apparel and accessories for women, men and children. It operates approximately 270 stores in over 26 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates, encompassing a total of approximately 25 million square feet. Its nationally distributed brand assortment includes a range of labels in the apparel, accessories, footwear, cosmetics and home furnishings industries, such as Anne Klein, Calvin Klein, Carters, Chaps, Clarks, Clinique, Coach, Estee Lauder, Fossil, Free People, Frye, Jessica Simpson and Vince Camuto. Its private brand portfolio includes Laura Ashley, Ruff Hewn, Relativity and Casa by Victor Alfaro.

Receive News & Stock Ratings for Dillard's Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Dillard's Inc. and related stocks with our FREE daily email newsletter.