School Specialty (OTCMKTS:SCOO) and HD Supply (NASDAQ:HDS) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, profitability, analyst recommendations, institutional ownership and valuation.

Earnings & Valuation

This table compares School Specialty and HD Supply’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
School Specialty $658.38 million 0.12 $6.77 million N/A N/A
HD Supply $5.12 billion 1.37 $970.00 million $2.31 16.58

HD Supply has higher revenue and earnings than School Specialty.

Insider & Institutional Ownership

0.8% of School Specialty shares are held by institutional investors. Comparatively, 95.1% of HD Supply shares are held by institutional investors. 26.8% of School Specialty shares are held by insiders. Comparatively, 0.7% of HD Supply shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for School Specialty and HD Supply, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
School Specialty 0 0 0 0 N/A
HD Supply 0 4 9 0 2.69

HD Supply has a consensus price target of $48.13, suggesting a potential upside of 25.69%. Given HD Supply’s higher possible upside, analysts plainly believe HD Supply is more favorable than School Specialty.

Volatility & Risk

School Specialty has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500. Comparatively, HD Supply has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500.

Profitability

This table compares School Specialty and HD Supply’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
School Specialty -1.61% -11.58% -3.29%
HD Supply 11.96% 36.44% 12.45%

Summary

HD Supply beats School Specialty on 10 of the 11 factors compared between the two stocks.

About School Specialty

School Specialty, Inc., together with its subsidiaries, distributes supplies, furniture, technology products, supplemental learning products, and curriculum solutions to the education marketplace in the United States and Canada. The company's Distribution segment offers office products, classroom supplies, janitorial and sanitation supplies, school equipment, planning and development products, physical education products, art supplies and paper, and others; supplemental learning materials, teaching resources, special needs and education products, early childhood offerings, classroom technology, planning and student development, and school health and furniture; and project management and design services for school refurbishment and new construction projects. This segment provides its products primarily under the Childcraft, Sax Arts & Crafts, Califone, Premier Agendas, Classroom Select, Sportime, Abilitations, Hammond & Stephens, SPARK, Brodhead Garrett, School Smart, Royal Seating, and Projects by Design brands. Its Curriculum segment develops standards-based curriculum products, supplemental and intervention curriculum materials, instructional programs, and student assessment tools in the areas of science, math, and reading and math intervention, as well as comprehension, vocabulary, spelling, and grammar. This segment sells its products to teachers, curriculum specialists, and other educators under various product lines, such as Delta Education, FOSS, CPO Science, Frey Scientific, Educator's Publishing Service, Academy of Reading, Academy of Math, Wordly Wise 3000, Explode the Code, ThinkMath!, Making Connections, and S.P.I.R.E. The company offers its products through its sales force, catalogs, and its proprietary e-commerce Websites. School Specialty, Inc. was founded in 1959 and is headquartered in Greenville, Wisconsin.

About HD Supply

HD Supply Holdings, Inc. operates as an industrial distributor in North America. It operates through two segments, Facilities Maintenance, and Construction & Industrial. The Facilities Maintenance segment offers electrical and lighting items, plumbing, appliances, janitorial supplies, hardware, kitchen and bath cabinets, window coverings, textiles and guest amenities, healthcare maintenance, and water and wastewater treatment products, as well as heating, ventilating, and air conditioning products. The Construction & Industrial segment offers tilt-up brace systems, forming and shoring systems, concrete chemicals, hand and power tools, cutting tools, rebars, ladders, safety and fall arrest equipment, specialty screws and fasteners, sealants and adhesives, drainage pipes, geo-synthetics, erosion and sediment control equipment, and other engineered materials used in non-residential and residential construction. This segment also provides home improvement solutions, such as light remodeling and construction supplies, kitchen and bath cabinets, windows, plumbing materials, electrical equipment, and other products primarily to small remodeling contractors and trade professionals through local retail outlets. In addition, it offers pre-bid assistance, product submittals, engineering, and tool repair services. It serves contractors, maintenance professionals, home builders, industrial businesses, and government entities through a network of branches and professional sales force, as well as through print catalogs and e-commerce. The company was formerly known as HDS Investment Holding, Inc. and changed its name to HD Supply Holdings, Inc. in April 2013. HD Supply Holdings, Inc. is headquartered in Atlanta, Georgia.

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