Five Below (NASDAQ:FIVE) and BJs Wholesale Club (NYSE:BJ) are both mid-cap retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.

Insider and Institutional Ownership

65.8% of BJs Wholesale Club shares are owned by institutional investors. 2.6% of Five Below shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Five Below and BJs Wholesale Club’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Five Below 8.83% 25.97% 16.66%
BJs Wholesale Club N/A N/A N/A

Analyst Recommendations

This is a summary of current ratings for Five Below and BJs Wholesale Club, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Five Below 0 7 10 0 2.59
BJs Wholesale Club 1 5 7 0 2.46

Five Below currently has a consensus target price of $114.63, suggesting a potential downside of 9.43%. BJs Wholesale Club has a consensus target price of $29.45, suggesting a potential upside of 4.37%. Given BJs Wholesale Club’s higher probable upside, analysts clearly believe BJs Wholesale Club is more favorable than Five Below.

Earnings & Valuation

This table compares Five Below and BJs Wholesale Club’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Five Below $1.28 billion 5.50 $102.45 million $1.79 70.46
BJs Wholesale Club N/A N/A N/A N/A N/A

Five Below has higher revenue and earnings than BJs Wholesale Club.

Summary

Five Below beats BJs Wholesale Club on 7 of the 9 factors compared between the two stocks.

About Five Below

Five Below, Inc. operates as a specialty value retailer in the United States. It offers accessories, including novelty socks, sunglasses, jewelry, scarves, gloves, hair accessories, athletic tops and bottoms, and T-shirts, as well as beauty products comprising nail polish, lip gloss, fragrance, and branded cosmetics; and items used to complete and personalize living space, including glitter lamps, posters, frames, fleece blankets, plush items, pillows, candles, incense, lighting, novelty décor, and related items, as well as provides storage options for the customers room. The company also provides sport balls; team sports merchandise and fitness accessories, such as hand weights, jump ropes, and gym balls; games, including name brand board games, puzzles, collectibles, and toys; and pool, beach and outdoor toys, games, and accessories. In addition, it offers accessories, such as cases, chargers, headphones, and other related items for cell phones, tablet, audio, and computers; books, video games, and DVDs; craft activity kits; arts and crafts supplies that consist of crayons, markers, and stickers; and trend-right items for school comprising backpacks, fashion notebooks and journals, novelty pens and pencils, locker accessories, and everyday name brand items. Further, the company provides party goods, decorations, gag gifts, and greeting cards, as well as every day and special occasion merchandise products; assortment of classic and novelty candy bars, movie-size box candy, seasonal-related candy, and gum and snack food; chilled drinks through coolers; and seasonally-specific items used to celebrate and decorate for events. It primarily serves teen and pre-teen customers. As of February 3, 2018, it operated 625 stores in 32 states. The company was formerly known as Cheap Holdings, Inc. and changed its name to Five Below, Inc. in August 2002. Five Below, Inc. was founded in 2002 and is headquartered in Philadelphia, Pennsylvania..

About BJs Wholesale Club

BJ's Wholesale Club Holdings, Inc. operates as a warehouse club on the East Coast of the United States. It offers perishable, edible grocery, general merchandise, and non-edible grocery products. The company also sells electronics, computers, office supplies and equipment, home products, health and beauty aids, sporting goods, outdoor living, baby products, toys, and jewelry through Website. The company offers its products under the trademarks and service marks, such as BJ's Wholesale Club, BJ's, Wellsley Farms, Berkley Jensen, My BJ's Perks, BJ's Easy Renewal, BJ's Gas, BJ's Perks Elite, BJ's Perks Plus, Inner Circle, and BJ's Perks Rewards. As of February 3, 2018, it operated 215 clubs and 133 gasoline stations. The company was formerly known as Beacon Holding Inc. and changed its name to BJ's Wholesale Club Holdings, Inc. in February 2018. The company is based in Westborough, Massachusetts.

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