Fred’s (NASDAQ: FRED) is one of 12 publicly-traded companies in the “Variety stores” industry, but how does it weigh in compared to its peers? We will compare Fred’s to related companies based on the strength of its analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends.
This table compares Fred’s and its peers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Fred’s pays an annual dividend of $0.12 per share and has a dividend yield of 7.5%. Fred’s pays out -3.2% of its earnings in the form of a dividend. As a group, “Variety stores” companies pay a dividend yield of 1.7% and pay out 43.3% of their earnings in the form of a dividend. Fred’s is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
99.0% of Fred’s shares are held by institutional investors. Comparatively, 78.8% of shares of all “Variety stores” companies are held by institutional investors. 6.9% of Fred’s shares are held by company insiders. Comparatively, 12.6% of shares of all “Variety stores” companies are held by company 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.
Risk & Volatility
Fred’s has a beta of 1.59, meaning that its share price is 59% more volatile than the S&P 500. Comparatively, Fred’s’ peers have a beta of 0.89, meaning that their average share price is 11% less volatile than the S&P 500.
This is a summary of current recommendations and price targets for Fred’s and its peers, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Fred’s currently has a consensus price target of $6.00, indicating a potential upside of 272.67%. As a group, “Variety stores” companies have a potential upside of 4.38%. Given Fred’s’ higher possible upside, research analysts plainly believe Fred’s is more favorable than its peers.
Valuation and Earnings
This table compares Fred’s and its peers gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Net Income||Price/Earnings Ratio|
|Fred’s||$1.81 billion||-$150.18 million||-0.43|
|Fred’s Competitors||$65.90 billion||$1.76 billion||21.60|
Fred’s’ peers have higher revenue and earnings than Fred’s. Fred’s is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.
Fred’s peers beat Fred’s on 10 of the 15 factors compared.
Fred's, Inc., together with its subsidiaries, sells general merchandise through its retail discount stores and full service pharmacies. The company, through its stores, offers household cleaning supplies, health products, beauty and personal care products, disposable diapers, pet foods, paper products, various food and beverage products, and pharmaceuticals to low, middle, and fixed income families in small- to medium- sized towns. It also sells general merchandise to franchised Fred's stores. As of January 28, 2017, the company operated 628 retail stores, including 55 express stores and 3 specialty pharmacy-only locations; 362 pharmacies; 3 specialty pharmacy facilities; and 16 franchised stores in 15 states of the southeastern United States. Fred's, Inc. was founded in 1947 and is headquartered in Memphis, Tennessee.
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