Financial Analysis: Aaron’s (AAN) versus Black Diamond Group (BDIMF)

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Aaron’s (NYSE:AAN) and Black Diamond Group (OTCMKTS:BDIMF) are both retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares Aaron’s and Black Diamond Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aaron’s $3.38 billion 0.94 $292.53 million $2.56 18.16
Black Diamond Group $120.79 million 0.74 -$73.59 million N/A N/A

Aaron’s has higher revenue and earnings than Black Diamond Group.

Dividends

Aaron’s pays an annual dividend of $0.14 per share and has a dividend yield of 0.3%. Black Diamond Group does not pay a dividend. Aaron’s pays out 5.5% of its earnings in the form of a dividend. Aaron’s has raised its dividend for 12 consecutive years.

Profitability

This table compares Aaron’s and Black Diamond Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aaron’s 8.39% 12.22% 7.96%
Black Diamond Group -53.71% -6.11% -3.36%

Analyst Ratings

This is a summary of recent recommendations and price targets for Aaron’s and Black Diamond Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aaron’s 0 2 5 0 2.71
Black Diamond Group 0 0 0 0 N/A

Aaron’s presently has a consensus target price of $57.60, suggesting a potential upside of 23.90%. Given Aaron’s’ higher possible upside, research analysts clearly believe Aaron’s is more favorable than Black Diamond Group.

Volatility and Risk

Aaron’s has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500. Comparatively, Black Diamond Group has a beta of 1.96, indicating that its stock price is 96% more volatile than the S&P 500.

Summary

Aaron’s beats Black Diamond Group on 10 of the 12 factors compared between the two stocks.

Aaron’s Company Profile

Aaron's, Inc. operates as an omnichannel provider of lease-purchase solutions. It operates through three segments: Progressive Leasing, Aaron's Business, and DAMI. The company engages in the sale, lease ownership, and specialty retailing of furniture, consumer electronics, home appliances, and accessories. As of February 15, 2018, it operated approximately 1,726 company-operated and franchised stores in 47 states and Canada, as well as its e-commerce platform, Aarons.com. Aaron's, Inc. was founded in 1955 and is headquartered in Atlanta, Georgia.

Black Diamond Group Company Profile

Black Diamond Group Limited rents and sells workspace and modular workforce accommodation solutions. It operates through four segments: BOXX Modular, Black Diamond Camps & Lodging, Black Diamond Energy Services, and Black Diamond International. The BOXX Modular segment provides modular space rentals to customers in construction, real estate development, manufacturing, education, financial institutions, resource industries, and government agencies in North America. Its products include office units, lavatories, storage units, large multi-unit office complexes, classroom facilities, high security modular buildings, custom manufactured modular facilities, and blast resistant structures. This segment also sells new and used space rentals units; and provides delivery, installation, project management, and ancillary products and services. The Camps & Lodging segment provides workforce accommodation solutions, such as camps with on-site management of catering, housekeeping, front desk services, as well as fresh water and waste water management, electricity, television, telephone, Internet, and the provision of consumables, such as diesel and propane. The Energy Services segment provides equipment rentals and accommodations to customers in the oil and gas industry throughout western Canada and the Midwest and western United States. This segment offers accommodations, which consist of single and multi-unit complexes; and surface rentals, including various types of equipment that support drilling, completion, and production activities. The segment also provides installation, delivery, maintenance, and catering services. The International segment rents and sells remote workforce housing and modular space rental solutions primarily in Australia. This segment serves customers in resources, oil and gas, construction, general industry, government, and education sectors. The company was founded in 2003 and is headquartered in Calgary, Canada.

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