Head-To-Head Contrast: Dillard’s (DDS) and Burlington (BURL)

Burlington (NYSE: BURL) and Dillard’s (NYSE:DDS) are both mid-cap retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, institutional ownership, risk and profitability.

Insider and Institutional Ownership

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90.8% of Dillard’s shares are held by institutional investors. 1.9% of Burlington shares are held by company insiders. Comparatively, 23.3% of Dillard’s shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Burlington and Dillard’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Burlington 6.31% -754.89% 11.19%
Dillard’s 3.45% 8.57% 3.61%

Volatility and Risk

Burlington has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500. Comparatively, Dillard’s has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500.

Dividends

Dillard’s pays an annual dividend of $0.40 per share and has a dividend yield of 0.5%. Burlington does not pay a dividend. Dillard’s pays out 8.3% of its earnings in the form of a dividend. Dillard’s has increased its dividend for 4 consecutive years.

Analyst Ratings

This is a breakdown of current ratings for Burlington and Dillard’s, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Burlington 0 0 15 0 3.00
Dillard’s 2 0 1 0 1.67

Burlington currently has a consensus price target of $131.07, suggesting a potential downside of 4.86%. Dillard’s has a consensus price target of $57.00, suggesting a potential downside of 28.40%. Given Burlington’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Burlington is more favorable than Dillard’s.

Valuation and Earnings

This table compares Burlington and Dillard’s’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Burlington $6.11 billion 1.54 $384.85 million $4.37 31.52
Dillard’s $6.42 billion 0.35 $221.32 million $4.80 16.59

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

Summary

Burlington beats Dillard’s on 9 of the 17 factors compared between the two stocks.

Burlington Company Profile

Burlington Stores, Inc. operates as a retailer of branded apparel products in the United States. The company offers fashion-focused merchandise, including ladies sportswear, menswear, youth apparel, baby furniture, footwear, accessories, home décor and gifts, and coats. It operates 629 stores, including an Internet store in 45 states and Puerto Rico. Burlington Stores, Inc. was founded in 1972 and is headquartered in Burlington, New Jersey.

Dillard’s Company Profile

Dillard's, Inc. operates as fashion apparel, cosmetics, and home furnishing retailer in the United States. It operates through two segments, Retail Operations and Construction. The company's stores offer a selection of merchandise, including fashion apparel for women, men, and children; accessories; cosmetics; home furnishings; and other consumer goods. Its brand merchandise includes Antonio Melani, Gianni Bini, GB, Roundtree & Yorke, and Daniel Cremieux. The company also sells its merchandise online through its Website, dillards.com, which features online gift registries and various other services. In addition, it operates a general contracting construction company that engages in constructing and remodeling stores. As of January 28, 2017, the company operated 293 Dillard's stores, including 25 clearance centers; and an Internet store. Dillard's, Inc. was founded in 1938 and is based in Little Rock, Arkansas.

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