Head-To-Head Analysis: ODP (NASDAQ:ODP) versus Winmark (NASDAQ:WINA)

Winmark (NASDAQ:WINA) and ODP (NASDAQ:ODP) are both small-cap retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and recommmendations for Winmark and ODP, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Winmark	0	0	0	0	0.00
ODP	0	1	0	0	2.00

ODP has a consensus target price of $19.00, suggesting a potential downside of 8.35%. Given ODP’s stronger consensus rating and higher probable upside, analysts plainly believe ODP is more favorable than Winmark.

Profitability

This table compares Winmark and ODP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Winmark	49.48%	-98.49%	103.78%
ODP	0.39%	11.22%	2.58%

Earnings and Valuation

This table compares Winmark and ODP”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Winmark	$83.40 million	20.81	$39.95 million	$11.23	43.54
ODP	$6.69 billion	0.09	-$3.00 million	$0.66	31.41

Winmark has higher earnings, but lower revenue than ODP. ODP is trading at a lower price-to-earnings ratio than Winmark, indicating that it is currently the more affordable of the two stocks.

Dividends

Winmark pays an annual dividend of $3.84 per share and has a dividend yield of 0.8%. ODP pays an annual dividend of $0.10 per share and has a dividend yield of 0.5%. Winmark pays out 34.2% of its earnings in the form of a dividend. ODP pays out 15.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Winmark has raised its dividend for 5 consecutive years. Winmark is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

73.3% of Winmark shares are owned by institutional investors. Comparatively, 99.6% of ODP shares are owned by institutional investors. 10.1% of Winmark shares are owned by insiders. Comparatively, 3.6% of ODP shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility and Risk

Winmark has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, ODP has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500.

Summary

Winmark beats ODP on 9 of the 16 factors compared between the two stocks.

About Winmark

Winmark Corporation, a resale company operates as a franchisor for small business in the United States and Canada. The company franchises retail stores concepts that buy, sell and trade merchandise. It also operates middle-market equipment leasing business. In addition, the company buys and sells used clothing and accessories geared toward the teenage and young adult market under Plato’s Closet brand; and operates stores which buys and sells used and new children’s clothing, toys, furniture, equipment, and accessories primarily to parents of children ages infant to 12 years under the Once Upon A Child brand. Further, it buys, sells, trades in, and used and new sporting goods, equipment, and accessories for various athletic activities including team sports, such as baseball/softball, hockey, football, lacrosse, and soccer, as well as fitness, ski/snowboard, golf, and others under the Play It Again Sports brand; and buys and sells used women’s apparel, shoes, and accessories under the Style Encore brand. Additionally, the company buys, sells, trades in, and used and new musical instruments, speakers, amplifiers, music-related electronics, and related accessories under the Music Go Round brand. Winmark Corporation was incorporated in 1988 and is headquartered in Minneapolis, Minnesota.

About ODP

The ODP Corporation provides business services and supplies, products, and digital workplace technology solutions for small, medium, and enterprise businesses in the United States, Puerto Rico, and the U.S. Virgin Islands. The company operates through four divisions: ODP Business Solutions, Office Depot, Veyer, and Varis. The ODP Business Solutions division offers adjacency products, including cleaning, janitorial, and breakroom supplies, office furniture, technology products; and copy and print services through sales force, catalogs, telesales, and through Internet websites. This segment also engages in office supply distribution business. The Office Depot division sells office supplies, technology products and solutions, business machines and related supplies, cleaning, breakroom and facilities products, personal protective equipment, and office furniture; and offers business services, including copying, printing, digital imaging, mailing, shipping, and technology support services through a fully integrated omni-channel platform of 980 Office Depot and OfficeMax retail stores, and through www.officedepot.com. The Veyer division engages in supply chain, distribution, procurement, and global sourcing operations. The Varis division operates tech-enabled B2B indirect procurement marketplace, where buyers and suppliers to transact through the platform's consumer-like buying experience, advanced spend management tools, network of suppliers, and technology capabilities. The company offers its products under various brands, including Office Depot, OfficeMax, and Grand&Toy, as well as others. The ODP Corporation was incorporated in 1986 and is headquartered in Boca Raton, Florida.