Barnes & Noble Education (NYSE:BNED) versus Build-A-Bear Workshop (NYSE:BBW) Head-To-Head Contrast

Build-A-Bear Workshop (NYSE:BBW) and Barnes & Noble Education (NYSE:BNED) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Dividends

Build-A-Bear Workshop pays an annual dividend of $0.92 per share and has a dividend yield of 3.6%. Barnes & Noble Education pays an annual dividend of $0.32 per share and has a dividend yield of 2.7%. Build-A-Bear Workshop pays out 22.8% of its earnings in the form of a dividend. Barnes & Noble Education pays out 50.0% 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. Build-A-Bear Workshop has increased its dividend for 1 consecutive years. Build-A-Bear Workshop is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Build-A-Bear Workshop has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500. Comparatively, Barnes & Noble Education has a beta of 1.44, meaning that its stock price is 44% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Build-A-Bear Workshop and Barnes & Noble Education, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Build-A-Bear Workshop	1	1	2	0	2.25
Barnes & Noble Education	1	1	2	0	2.25

Build-A-Bear Workshop currently has a consensus target price of $53.50, indicating a potential upside of 109.64%. Barnes & Noble Education has a consensus target price of $17.25, indicating a potential upside of 47.17%. Given Build-A-Bear Workshop’s higher probable upside, analysts plainly believe Build-A-Bear Workshop is more favorable than Barnes & Noble Education.

Institutional and Insider Ownership

79.3% of Build-A-Bear Workshop shares are held by institutional investors. Comparatively, 38.5% of Barnes & Noble Education shares are held by institutional investors. 4.0% of Build-A-Bear Workshop shares are held by company insiders. Comparatively, 1.7% of Barnes & Noble Education shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Build-A-Bear Workshop and Barnes & Noble Education”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Build-A-Bear Workshop	$529.83 million	0.59	$52.20 million	$4.03	6.33
Barnes & Noble Education	$1.71 billion	0.24	$16.87 million	$0.64	18.31

Build-A-Bear Workshop has higher earnings, but lower revenue than Barnes & Noble Education. Build-A-Bear Workshop is trading at a lower price-to-earnings ratio than Barnes & Noble Education, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Build-A-Bear Workshop and Barnes & Noble Education’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Build-A-Bear Workshop	9.96%	29.66%	13.60%
Barnes & Noble Education	1.29%	8.77%	2.66%

Summary

Build-A-Bear Workshop beats Barnes & Noble Education on 12 of the 15 factors compared between the two stocks.

About Build-A-Bear Workshop

Build-A-Bear Workshop, Inc. operates as a multi-channel retailer of plush animals and related products in the United States, Canada, the United Kingdom, Ireland, and internationally. The company operates through three segments: Direct-to-Consumer, Commercial, and International Franchising. Its merchandise comprises various styles of plush products to be stuffed, pre-stuffed plush products, and sounds and scents that can be added to the stuffed animals, as well as range of clothing, shoes and accessories, and other toy and novelty items, including family sleepwear. The company operates its stores under the Build-A-Bear Workshop brand name; and sells its products through its e-commerce sites and third-party marketplace sites. Build-A-Bear Workshop, Inc. was founded in 1997 and is headquartered in Saint Louis, Missouri.

About Barnes & Noble Education

Barnes and Noble Education, Inc. engages in the management and operation of bookstore chains in universities. It operates through the Retail and Wholesale segments. The Retail segment operates college, university, and K-12 school bookstores, physical bookstores, and virtual bookstores. The Wholesale segment sells and distributes new and used textbooks to physical bookstores. The company was founded by Leonard S, Riggio in 1965 and is headquartered in Basking Ridge, NJ.