Contrasting Zale Corporation (ZLC) & Signet Jewelers Limited (SIG)
Zale Corporation (NYSE: ZLC) and Signet Jewelers Limited (NYSE:SIG) are both cyclical consumer goods & services companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, risk, analyst recommendations, dividends, institutional ownership and profitability.
This is a breakdown of recent ratings for Zale Corporation and Signet Jewelers Limited, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Signet Jewelers Limited||0||10||5||0||2.33|
Signet Jewelers Limited has a consensus target price of $67.21, indicating a potential upside of 26.80%.
Valuation and Earnings
This table compares Zale Corporation and Signet Jewelers Limited’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Signet Jewelers Limited||$6.41 billion||0.50||$543.20 million||$6.08||8.72|
Signet Jewelers Limited has higher revenue and earnings than Zale Corporation. Zale Corporation is trading at a lower price-to-earnings ratio than Signet Jewelers Limited, indicating that it is currently the more affordable of the two stocks.
Signet Jewelers Limited pays an annual dividend of $1.24 per share and has a dividend yield of 2.3%. Zale Corporation does not pay a dividend. Signet Jewelers Limited pays out 20.4% of its earnings in the form of a dividend. Zale Corporation has raised its dividend for 5 consecutive years.
This table compares Zale Corporation and Signet Jewelers Limited’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Signet Jewelers Limited||7.32%||20.76%||7.71%|
Signet Jewelers Limited beats Zale Corporation on 7 of the 9 factors compared between the two stocks.
Zale Corporation Company Profile
Zale Corporation, through its wholly owned subsidiaries, is a retailer of fine jewelry in North America. The Company operates in three segments: fine jewelry, kiosk jewelry and all other. As of July 31, 2012, the Company operated 1,124 specialty retail jewelry stores and 654 kiosks located mainly in shopping malls throughout the United States, Canada and Puerto Rico. The Company’s fine jewelry segment consists of five brands: Zales Jewelers, Peoples Jewellers, Zales Outlet, Mappins Jewellers, and Gordon’s Jewelers The Company’s kiosk jewelry operates under the brand names Piercing Pagoda, Plumb Gold, and Silver and Gold Connection (collectively, Piercing Pagoda) through mall-based kiosks. The Company provides insurance and reinsurance services for various types of insurance coverage, which is marketed primarily to its private label credit card guests, through Zale Indemnity Company, Zale Life Insurance Company and Jewel Re-Insurance Ltd.
Signet Jewelers Limited Company Profile
Signet Jewelers Limited is a retailer of diamond jewelry. The Company’s segments include the Sterling Jewelers division; the Zale division, which consists of the Zale Jewelry and Piercing Pagoda segments; the UK Jewelry division, and Other. The Sterling Jewelers division’s stores operate in the United States principally as Kay Jewelers (Kay), Kay Jewelers Outlet, Jared The Galleria Of Jewelry (Jared) and Jared Vault. The Zale division operates jewelry stores (Zale Jewelry) and kiosks (Piercing Pagoda), located primarily in shopping malls across the United States, Canada and Puerto Rico. Zale Jewelry includes the United States store brand, Zales, and the Canadian store brand, Peoples Jewellers. Piercing Pagoda operates through mall-based kiosks. The UK Jewelry division operates stores in the United Kingdom, Republic of Ireland and Channel Islands. The Other segment includes the operations of subsidiaries involved in the purchasing and conversion of rough diamonds to polished stones.
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