Financial Contrast: Macy’s (NYSE:M) versus eBay (NASDAQ:EBAY)

eBay (NASDAQ:EBAY) and Macy’s (NYSE:M) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Risk and Volatility

eBay has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500. Comparatively, Macy’s has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for eBay and Macy’s, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
eBay	2	17	14	1	2.41
Macy’s	2	9	2	0	2.00

eBay currently has a consensus price target of $115.12, indicating a potential upside of 6.81%. Macy’s has a consensus price target of $22.78, indicating a potential upside of 1.98%. Given eBay’s stronger consensus rating and higher probable upside, analysts plainly believe eBay is more favorable than Macy’s.

Dividends

eBay pays an annual dividend of $1.24 per share and has a dividend yield of 1.2%. Macy’s pays an annual dividend of $0.77 per share and has a dividend yield of 3.4%. eBay pays out 25.7% of its earnings in the form of a dividend. Macy’s pays out 28.2% 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. eBay has increased its dividend for 7 consecutive years and Macy’s has increased its dividend for 4 consecutive years.

Insider & Institutional Ownership

87.5% of eBay shares are held by institutional investors. Comparatively, 87.4% of Macy’s shares are held by institutional investors. 0.7% of eBay shares are held by company insiders. Comparatively, 1.1% of Macy’s shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares eBay and Macy’s”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
eBay	$12.01 billion	3.99	$2.03 billion	$4.83	22.31
Macy’s	$22.62 billion	0.26	$642.00 million	$2.73	8.18

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

Profitability

This table compares eBay and Macy’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
eBay	18.50%	47.88%	12.38%
Macy’s	3.29%	13.21%	3.83%

Summary

eBay beats Macy’s on 14 of the 18 factors compared between the two stocks.

About eBay

eBay Inc., together with its subsidiaries, operates marketplace platforms that connect buyers and sellers in the United States, the United Kingdom, China, Germany, and internationally. The company’s marketplace platform includes its online marketplace at ebay.com, off-platform businesses, and the eBay suite of mobile apps. Its platforms enable users to list, sell, and buy various products. The company was founded in 1995 and is headquartered in San Jose, California.

About Macy’s

Macy’s, Inc. engages in the retail of apparel, accessories, cosmetics, home furnishings, and other consumer goods. The firm’s brands include Macy’s, Bloomingdale’s, and Bluemercury. It offers men’s, women’s, and children’s apparel, women’s accessories, intimate apparel, shoes, cosmetics, fragrances, as well as home and miscellaneous products. The company was founded by Rowland H. Macy in 1858 and is headquartered in New York, NY.