Critical Analysis: Signet Jewelers (SIG) versus The Competition

Signet Jewelers (NYSE:SIG) is one of 286 public companies in the “Specialty Retail” industry, but how does it compare to its peers? We will compare Signet Jewelers to related companies based on the strength of its valuation, profitability, earnings, risk, institutional ownership, analyst recommendations and dividends.

Risk and Volatility

Signet Jewelers has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500. Comparatively, Signet Jewelers’ peers have a beta of 1.69, indicating that their average share price is 69% more volatile than the S&P 500.

Profitability

This table compares Signet Jewelers and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Signet Jewelers	4.29%	22.54%	7.35%
Signet Jewelers Competitors	-2.75%	-25.53%	2.88%

Institutional & Insider Ownership

51.6% of shares of all “Specialty Retail” companies are owned by institutional investors. 1.2% of Signet Jewelers shares are owned by insiders. Comparatively, 20.9% of shares of all “Specialty Retail” companies are owned 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.

Dividends

Signet Jewelers pays an annual dividend of $1.40 per share and has a dividend yield of 1.5%. Signet Jewelers pays out 19.6% of its earnings in the form of a dividend. As a group, “Specialty Retail” companies pay a dividend yield of 2.0% and pay out 35.0% of their earnings in the form of a dividend. Signet Jewelers has raised its dividend for 4 consecutive years.

Valuation & Earnings

This table compares Signet Jewelers and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Signet Jewelers	$6.81 billion	$294.40 million	13.01
Signet Jewelers Competitors	$6.98 billion	$390.24 million	19.49

Signet Jewelers’ peers have higher revenue and earnings than Signet Jewelers. Signet Jewelers 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.

Analyst Ratings

This is a breakdown of current recommendations for Signet Jewelers and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Signet Jewelers	0	5	5	2	2.75
Signet Jewelers Competitors	3523	15165	21108	544	2.46

Signet Jewelers presently has a consensus price target of $112.00, suggesting a potential upside of 20.76%. As a group, “Specialty Retail” companies have a potential upside of 8.02%. Given Signet Jewelers’ stronger consensus rating and higher possible upside, research analysts plainly believe Signet Jewelers is more favorable than its peers.

Summary

Signet Jewelers peers beat Signet Jewelers on 8 of the 15 factors compared.

Signet Jewelers Company Profile

Signet Jewelers Limited operates as a diamond jewelry retailer. It operates through three segments: North America, International, and Other. The North America segment operates jewelry stores in jewelry stores in malls, mall-based kiosks, and off-mall locations in the United States and Canada primarily under the Kay Jewelers, Kay Jewelers Outlet, Jared The Galleria Of Jewelry, Jared Vault, Zales Outlet, Zales Jewelers, Diamonds Direct, James Allen, Banter by Piercing Pagoda, and Peoples Jewellers names, as well as operates online through its digital banners, James Allen and Blue Nile. This segment also engages in jewelry subscription business. The International segment operates stores in shopping malls and off-mall locations primarily under the H.Samuel and Ernest Jones brands in the United Kingdom, Republic of Ireland, and Channel Islands. The Other segment is involved in the purchase and conversion of rough diamonds to polished stones, as well as the provision of diamond polishing services. Signet Jewelers Limited is based in Hamilton, Bermuda.