Tuesday Morning (NASDAQ: TUES) and Target (NYSE:TGT) are both retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, profitability, valuation and earnings.

Profitability

This table compares Tuesday Morning and Target’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tuesday Morning -2.90% -14.98% -7.50%
Target 4.09% 23.34% 6.75%

Risk & Volatility

Tuesday Morning has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500. Comparatively, Target has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.

Insider & Institutional Ownership

74.4% of Tuesday Morning shares are held by institutional investors. Comparatively, 85.5% of Target shares are held by institutional investors. 4.6% of Tuesday Morning shares are held by insiders. Comparatively, 0.2% of Target shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Tuesday Morning and Target, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tuesday Morning 0 2 0 0 2.00
Target 1 11 8 0 2.35

Tuesday Morning currently has a consensus target price of $3.00, suggesting a potential upside of 4.53%. Target has a consensus target price of $72.47, suggesting a potential downside of 6.57%. Given Tuesday Morning’s higher probable upside, analysts plainly believe Tuesday Morning is more favorable than Target.

Valuation and Earnings

This table compares Tuesday Morning and Target’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tuesday Morning $966.66 million 0.14 -$32.54 million ($0.74) -3.88
Target $71.88 billion 0.58 $2.93 billion $4.71 16.47

Target has higher revenue and earnings than Tuesday Morning. Tuesday Morning is trading at a lower price-to-earnings ratio than Target, indicating that it is currently the more affordable of the two stocks.

Dividends

Target pays an annual dividend of $2.48 per share and has a dividend yield of 3.2%. Tuesday Morning does not pay a dividend. Target pays out 52.7% of its earnings in the form of a dividend. Target has raised its dividend for 50 consecutive years.

Summary

Target beats Tuesday Morning on 13 of the 17 factors compared between the two stocks.

Tuesday Morning Company Profile

Tuesday Morning Corporation operates as a retailer of upscale decorative home accessories, housewares, seasonal goods, and gifts in the United States. The company offers various products, such as home textiles, home furnishings, housewares, and seasonal décor. It operates approximately 720 stores in 40 states. Tuesday Morning Corporation was founded in 1974 and is headquartered in Dallas, Texas.

Target Company Profile

Target Corporation operates as a general merchandise retailer in the United States. The company offers beauty and household essentials, including beauty products, personal and baby care products, cleaning products, paper products, and pet supplies; food and beverage products, such as dry grocery, dairy, frozen food, beverage, candy, snacks, deli, bakery, meat, and produce products; and apparel for women, men, boys, girls, toddlers, infants, and newborns, as well as intimate apparel, jewelry, accessories, and shoes. It also provides home furnishings and décor comprising furniture, lighting, kitchenware, small appliances, home décor, bed and bath products, home improvement products, and automotive products, as well as seasonal merchandise comprising patio furniture and holiday décor; and music, movies, books, computer software, sporting goods, and toys, as well as electronics that include video game hardware and software. In addition, the company offers in-store amenities, which comprise Target Café, Target Optical, Starbucks, and other food service offerings. It sells its products through its stores; and digital channels, including Target.com. As of March 8, 2018, the company operated 1,826 stores. Target Corporation was founded in 1902 and is headquartered in Minneapolis, Minnesota.

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