Critical Comparison: Burlington Stores (BURL) and Target Corporation (TGT)

Burlington Stores (NYSE: BURL) and Target Corporation (NYSE:TGT) are both mid-cap retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.

Earnings and Valuation

This table compares Burlington Stores and Target Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Burlington Stores $5.65 billion 1.04 $572.65 million $3.23 26.32
Target Corporation $69.32 billion 0.44 $7.20 billion $4.90 11.36

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Target Corporation has higher revenue and earnings than Burlington Stores. Target Corporation is trading at a lower price-to-earnings ratio than Burlington Stores, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Burlington Stores has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500. Comparatively, Target Corporation has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Burlington Stores and Target Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Burlington Stores 0 3 12 0 2.80
Target Corporation 6 15 5 0 1.96

Burlington Stores presently has a consensus price target of $104.08, indicating a potential upside of 22.43%. Target Corporation has a consensus price target of $62.35, indicating a potential upside of 12.04%. Given Burlington Stores’ stronger consensus rating and higher probable upside, equities analysts plainly believe Burlington Stores is more favorable than Target Corporation.

Dividends

Target Corporation pays an annual dividend of $2.40 per share and has a dividend yield of 4.3%. Burlington Stores does not pay a dividend. Target Corporation pays out 49.0% of its earnings in the form of a dividend. Burlington Stores has raised its dividend for 49 consecutive years.

Insider and Institutional Ownership

82.6% of Target Corporation shares are held by institutional investors. 2.6% of Burlington Stores shares are held by insiders. Comparatively, 0.3% of Target Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Burlington Stores and Target Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Burlington Stores 4.08% -294.39% 9.35%
Target Corporation 4.02% 25.17% 7.46%

Summary

Burlington Stores beats Target Corporation on 10 of the 17 factors compared between the two stocks.

About Burlington Stores

Burlington Stores, Inc. is a retailer of branded apparel. As of January 28, 2017, the Company operated 592 retail stores, inclusive of an Internet store, in 45 states and Puerto Rico. Its product categories include coats, women, men, juniors, girls, boys, shoes, handbags and accessories, beauty and fragrance, home and toys. The product categories for coats include women’s coats and jackets, men’s coats and jackets, juniors coats and jackets, girls coats and jackets, boy’s coats and jackets, baby girl coats and jackets, and baby boy coats and jackets. The product categories for women include active wear, bottoms, coats and jackets, dresses, tops, scrubs, suit and suit separates, sweaters, swimwear and cover-ups. It also includes accessories, beauty and fragrance, handbags, jewelry, shoes and watches. The product categories for men include accessories, active wear, casual button down shirts, dress shirts, men’s coats jackets, fleece, graphic tees, hoodies and sweatshirts, and jeans.

About Target Corporation

Target Corporation (Target) is a general merchandise retailer selling products through its stores and digital channels. Its general merchandise stores offer an edited food assortment, including perishables, dry grocery, dairy and frozen items. Its digital channels include a range of general merchandise, including a range of items found in its stores, along with an assortment, such as additional sizes and colors sold only online. Its owned brands include Archer Farms, Market Pantry, Sutton & Dodge, Art Class, Merona, Threshold, Ava & Viv, Pillowfort, Room Essentials, Wine Cube, Cat & Jack, Simply Balanced and Wondershop. Its exclusive brands include C9 by Champion, Hand Made Modern, Mossimo, DENIZEN from Levi’s, Nate Berkus for Target, Fieldcrest, Kid Made Modern, Genuine Kids from OshKosh and Liz Lange for Target. As of January 28, 2017, the Company had 1,802 stores across the United States, including 1,535 owned stores, 107 leased stores and 160 owned buildings on leased land.

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