Critical Review: PriceSmart (PSMT) vs. Its Competitors

PriceSmart (NASDAQ:PSMT) is one of 150 publicly-traded companies in the “Consumer Staples Distribution & Retail” industry, but how does it weigh in compared to its rivals? We will compare PriceSmart to similar businesses based on the strength of its valuation, dividends, risk, profitability, analyst recommendations, institutional ownership and earnings.

Dividends

PriceSmart pays an annual dividend of $1.40 per share and has a dividend yield of 0.8%. PriceSmart pays out 25.9% of its earnings in the form of a dividend. As a group, “Consumer Staples Distribution & Retail” companies pay a dividend yield of 3.7% and pay out 37.2% of their earnings in the form of a dividend. PriceSmart has increased its dividend for 4 consecutive years.

Insider & Institutional Ownership

80.5% of PriceSmart shares are held by institutional investors. Comparatively, 45.0% of shares of all “Consumer Staples Distribution & Retail” companies are held by institutional investors. 17.0% of PriceSmart shares are held by insiders. Comparatively, 19.7% of shares of all “Consumer Staples Distribution & Retail” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for PriceSmart and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PriceSmart	0	0	2	0	3.00
PriceSmart Competitors	2248	8289	10083	459	2.42

PriceSmart presently has a consensus target price of $198.00, suggesting a potential upside of 20.17%. As a group, “Consumer Staples Distribution & Retail” companies have a potential upside of 55.01%. Given PriceSmart’s rivals higher possible upside, analysts clearly believe PriceSmart has less favorable growth aspects than its rivals.

Risk & Volatility

PriceSmart has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, PriceSmart’s rivals have a beta of 0.44, indicating that their average share price is 56% less volatile than the S&P 500.

Valuation and Earnings

This table compares PriceSmart and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
PriceSmart	$5.88 billion	$166.59 million	30.51
PriceSmart Competitors	$34.37 billion	$834.66 million	17.72

PriceSmart’s rivals have higher revenue and earnings than PriceSmart. PriceSmart is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares PriceSmart and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PriceSmart	2.83%	12.15%	6.70%
PriceSmart Competitors	-26.01%	3.70%	2.95%

Summary

PriceSmart beats its rivals on 9 of the 15 factors compared.

PriceSmart Company Profile

PriceSmart, Inc. operates membership warehouse clubs serving customers in Central America, the Caribbean and parts of South America. Its clubs offer a range of products and services, combining bulk-value shopping with locally relevant merchandise. Products include groceries and fresh foods, household goods, electronics, appliances, clothing and other consumer products. Depending on the location, clubs also offer services such as food courts, bakeries, pharmacies, optical centers and fuel. PriceSmart was founded by Sol and Robert Price, who previously helped build the Price Club warehouse-club business.