Critical Analysis: Ollie’s Bargain Outlet (NASDAQ:OLLI) & Kohl’s (NYSE:KSS)

Kohl’s (NYSE:KSS) and Ollie’s Bargain Outlet (NASDAQ:OLLI) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Volatility and Risk

Kohl’s has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, Ollie’s Bargain Outlet has a beta of 0.5, indicating that its share price is 50% less volatile than the S&P 500.

Earnings and Valuation

This table compares Kohl’s and Ollie’s Bargain Outlet”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kohl’s	$15.53 billion	0.13	$272.00 million	$2.29	7.55
Ollie’s Bargain Outlet	$2.79 billion	1.56	$240.60 million	$4.48	16.40

Kohl’s has higher revenue and earnings than Ollie’s Bargain Outlet. Kohl’s is trading at a lower price-to-earnings ratio than Ollie’s Bargain Outlet, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

98.0% of Kohl’s shares are held by institutional investors. 1.5% of Kohl’s shares are held by insiders. Comparatively, 0.7% of Ollie’s Bargain Outlet shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Kohl’s and Ollie’s Bargain Outlet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kohl’s	1.75%	6.75%	2.02%
Ollie’s Bargain Outlet	9.79%	14.54%	9.23%

Analyst Recommendations

This is a breakdown of recent recommendations for Kohl’s and Ollie’s Bargain Outlet, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kohl’s	5	8	1	1	1.87
Ollie’s Bargain Outlet	0	4	13	0	2.76

Kohl’s currently has a consensus price target of $16.17, indicating a potential downside of 6.50%. Ollie’s Bargain Outlet has a consensus price target of $102.43, indicating a potential upside of 39.42%. Given Ollie’s Bargain Outlet’s stronger consensus rating and higher probable upside, analysts plainly believe Ollie’s Bargain Outlet is more favorable than Kohl’s.

Summary

Ollie’s Bargain Outlet beats Kohl’s on 9 of the 15 factors compared between the two stocks.

About Kohl’s

Kohl’s Corporation operates as an omnichannel retailer in the United States. It offers branded apparel, footwear, accessories, beauty, and home products through its stores and website. The company provides its products primarily under the brand names of Croft & Barrow, Jumping Beans, SO, Sonoma Goods for Life, and Tek Gear, as well as Food Network, LC Lauren Conrad, Nine West, and Simply Vera Vera Wang. Kohl’s Corporation was founded in 1988 and is headquartered in Menomonee Falls, Wisconsin.

About Ollie’s Bargain Outlet

Ollie’s Bargain Outlet Holdings, Inc. is a holding company, which engages in the retail of closeouts, excess inventory, and salvage merchandise. It offers overstocks, package changes, manufacturer refurbished goods, and irregulars. The company’s products include housewares, food, books and stationery, bed and bath, floor coverings, electronics and toys. Ollie’s Bargain Outlet Holdings was founded by Mark Butler, Mort Bernstein, Oliver Rosenberg and Harry Coverman on July 29, 1982, and is headquartered in Harrisburg, PA.