Kohl's (NYSE: KSS) and The Bon-Ton Stores (OTCMKTS:BONT) are both cyclical consumer goods & services companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, analyst recommendations, valuation, institutional ownership, profitability and earnings.

Risk & Volatility

Kohl's has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, The Bon-Ton Stores has a beta of 3.12, indicating that its stock price is 212% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Kohl's 3.47% 12.72% 4.78%
The Bon-Ton Stores -3.57% N/A -4.98%

Institutional and Insider Ownership

16.8% of The Bon-Ton Stores shares are held by institutional investors. 1.2% of Kohl's shares are held by insiders. Comparatively, 45.7% of The Bon-Ton Stores shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Kohl's and The Bon-Ton Stores’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kohl's $18.69 billion 0.46 $556.00 million $3.77 13.62
The Bon-Ton Stores $2.67 billion 0.00 -$63.41 million ($4.46) -0.09

Kohl'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 Kohl's, indicating that it is currently the more affordable of the two stocks.

Dividends

Kohl's pays an annual dividend of $2.20 per share and has a dividend yield of 4.3%. The Bon-Ton Stores does not pay a dividend. Kohl's pays out 58.4% of its earnings in the form of a dividend. Kohl's has increased its dividend for 6 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings for Kohl's and The Bon-Ton Stores, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kohl's 4 9 6 0 2.11
The Bon-Ton Stores 0 0 0 0 N/A

Kohl's presently has a consensus price target of $43.09, suggesting a potential downside of 16.08%. Given Kohl's’ higher probable upside, research analysts clearly believe Kohl's is more favorable than The Bon-Ton Stores.

Summary

Kohl's beats The Bon-Ton Stores on 11 of the 15 factors compared between the two stocks.

About Kohl's

Kohl’s Corporation (Kohl’s) is an operator of department stores. The Company operates approximately 1,154 Kohl’s department stores, a Website (www.Kohls.com), approximately 12 FILA outlets, and approximately three Off-Aisle clearance centers. The Company’s stores and Website sell moderately-priced private label and national brand apparel, footwear, accessories, beauty and home products. The Company’s Website includes merchandise that is available in its stores, as well as merchandise that is available only online. The Company’s merchandise mix includes both national brands and private brands that are available only at Kohl’s. The Company’s private brands include Apt. 9, Croft & Barrow, Jumping Beans, SO and Sonoma Goods for Life. The Company’s exclusive brands include Food Network, Jennifer Lopez, Marc Anthony, Rock & Republic and Simply Vera Vera Wang.

About The Bon-Ton Stores

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.

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