Critical Comparison: Williams-Sonoma (WSM) and Its Rivals

Williams-Sonoma (NYSE:WSM) is one of 14 publicly-traded companies in the “RETAIL – HOME FRN” industry, but how does it contrast to its competitors? We will compare Williams-Sonoma to similar companies based on the strength of its profitability, institutional ownership, valuation, earnings, risk, analyst recommendations and dividends.

Valuation and Earnings

This table compares Williams-Sonoma and its competitors gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Williams-Sonoma	$7.71 billion	$1.13 billion	18.36
Williams-Sonoma Competitors	$26.26 billion	$2.36 billion	16.63

Williams-Sonoma’s competitors have higher revenue and earnings than Williams-Sonoma. Williams-Sonoma is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Institutional and Insider Ownership

99.3% of Williams-Sonoma shares are held by institutional investors. Comparatively, 67.1% of shares of all “RETAIL – HOME FRN” companies are held by institutional investors. 1.1% of Williams-Sonoma shares are held by company insiders. Comparatively, 5.2% of shares of all “RETAIL – HOME FRN” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Williams-Sonoma has a beta of 1.47, suggesting that its stock price is 47% more volatile than the S&P 500. Comparatively, Williams-Sonoma’s competitors have a beta of 1.48, suggesting that their average stock price is 48% more volatile than the S&P 500.

Profitability

This table compares Williams-Sonoma and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Williams-Sonoma	14.35%	52.79%	21.64%
Williams-Sonoma Competitors	6.52%	33.77%	8.67%

Dividends

Williams-Sonoma pays an annual dividend of $2.64 per share and has a dividend yield of 1.6%. Williams-Sonoma pays out 29.9% of its earnings in the form of a dividend. As a group, “RETAIL – HOME FRN” companies pay a dividend yield of 2.5% and pay out 49.0% of their earnings in the form of a dividend. Williams-Sonoma has raised its dividend for 20 consecutive years.

Analyst Recommendations

This is a summary of current recommendations for Williams-Sonoma and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Williams-Sonoma	1	11	6	1	2.37
Williams-Sonoma Competitors	171	1317	2026	38	2.54

Williams-Sonoma presently has a consensus target price of $176.75, indicating a potential upside of 9.03%. As a group, “RETAIL – HOME FRN” companies have a potential upside of 23.01%. Given Williams-Sonoma’s competitors stronger consensus rating and higher possible upside, analysts plainly believe Williams-Sonoma has less favorable growth aspects than its competitors.

Summary

Williams-Sonoma competitors beat Williams-Sonoma on 8 of the 15 factors compared.

Williams-Sonoma Company Profile

Williams-Sonoma, Inc. operates as an omni-channel specialty retailer of various products for home. It offers cooking, dining, and entertaining products, such as cookware, tools, electrics, cutlery, tabletop and bar, outdoor, furniture, and a library of cookbooks under the Williams Sonoma Home brand, as well as home furnishings and decorative accessories under the Williams Sonoma lifestyle brand; and furniture, bedding, lighting, rugs, table essentials, and decorative accessories under the Pottery Barn brand. The company also provides home decor products under the West Elm brand; kids accessories under the Pottery Barn Kids brand; and an organic bedding to multi-purpose furniture under the Pottery Barn Teen brand. In addition, it offers made-to-order lighting, hardware, furniture, and home decors inspired by history under the Rejuvenation brand; personalized products and custom gifts under the Mark and Graham brand; and colorful and vintage-inspired heirloom products under the GreenRow, as well as operates a 3-D imaging and augmented reality platform for the home furnishings and décor industry under the Outward brand. The company markets its products through e-commerce websites, direct-mail catalogs, and retail stores. Williams-Sonoma, Inc. was founded in 1956 and is headquartered in San Francisco, California.