The Michaels Companies (NASDAQ: MIK) is one of 21 publicly-traded companies in the “Other Specialty Retailers” industry, but how does it compare to its peers? We will compare The Michaels Companies to similar businesses based on the strength of its analyst recommendations, valuation, risk, institutional ownership, dividends, earnings and profitability.

Profitability

This table compares The Michaels Companies and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Michaels Companies 7.29% -22.53% 18.13%
The Michaels Companies Competitors 21.96% -15.12% 6.27%

Insider & Institutional Ownership

98.4% of The Michaels Companies shares are held by institutional investors. Comparatively, 61.9% of shares of all “Other Specialty Retailers” companies are held by institutional investors. 1.5% of The Michaels Companies shares are held by company insiders. Comparatively, 22.7% of shares of all “Other Specialty Retailers” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares The Michaels Companies and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
The Michaels Companies $5.21 billion $801.02 million 11.36
The Michaels Companies Competitors $3.37 billion $363.72 million 4.86

The Michaels Companies has higher revenue and earnings than its peers. The Michaels Companies is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Risk and Volatility

The Michaels Companies has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, The Michaels Companies’ peers have a beta of 1.23, meaning that their average stock price is 23% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for The Michaels Companies and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Michaels Companies 0 3 5 0 2.63
The Michaels Companies Competitors 387 1036 1091 48 2.31

The Michaels Companies currently has a consensus target price of $24.29, indicating a potential upside of 13.11%. As a group, “Other Specialty Retailers” companies have a potential downside of 13.42%. Given The Michaels Companies’ stronger consensus rating and higher probable upside, equities research analysts clearly believe The Michaels Companies is more favorable than its peers.

Summary

The Michaels Companies beats its peers on 8 of the 13 factors compared.

The Michaels Companies Company Profile

The Michaels Companies, Inc. (Michaels) is an arts and crafts specialty retailer in North America. The Company’s segments include Michaels-U.S., Michaels-Canada, Aaron Brothers, Pat Catan’s and Darice. As of January 28, 2017, the Company operated 1,223 Michaels retail stores in 49 states and Canada, with approximately 18,000 average square feet of selling space per store. It operated 109 Aaron Brothers stores in nine states, with approximately 5,500 average square feet of selling space and 35 Pat Catan’s stores in five states, with approximately 32,000 average square feet of selling space, as of January 28, 2017. The Company also operates an international wholesale business under the Darice brand name. The Company’s stores purchase custom frames, framing supplies and mats from its framing operation and subsidiary, Artistree, Inc. (Artistree), which consists of a manufacturing facility and four regional processing centers.

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