Tractor Supply (NASDAQ: TSCO) and Cabela’s (NYSE:CAB) are both mid-cap retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Earnings & Valuation

This table compares Tractor Supply and Cabela’s’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tractor Supply $7.04 billion 1.07 $849.82 million $3.32 17.93
Cabela’s $4.06 billion 0.91 $463.18 million $1.94 27.71

Tractor Supply has higher revenue and earnings than Cabela’s. Tractor Supply is trading at a lower price-to-earnings ratio than Cabela’s, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

92.3% of Tractor Supply shares are held by institutional investors. Comparatively, 56.4% of Cabela’s shares are held by institutional investors. 1.2% of Tractor Supply shares are held by company insiders. Comparatively, 21.0% of Cabela’s shares are held by company 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 for Tractor Supply and Cabela’s, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tractor Supply 0 16 9 0 2.36
Cabela’s 0 7 1 0 2.13

Tractor Supply presently has a consensus target price of $73.50, suggesting a potential upside of 23.45%. Cabela’s has a consensus target price of $64.60, suggesting a potential upside of 20.19%. Given Tractor Supply’s stronger consensus rating and higher possible upside, analysts clearly believe Tractor Supply is more favorable than Cabela’s.

Profitability

This table compares Tractor Supply and Cabela’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tractor Supply 6.16% 30.56% 15.64%
Cabela’s 3.29% 8.60% 1.98%

Volatility & Risk

Tractor Supply has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, Cabela’s has a beta of 0.14, meaning that its share price is 86% less volatile than the S&P 500.

Dividends

Tractor Supply pays an annual dividend of $1.08 per share and has a dividend yield of 1.8%. Cabela’s does not pay a dividend. Tractor Supply pays out 32.5% of its earnings in the form of a dividend.

Summary

Tractor Supply beats Cabela’s on 13 of the 16 factors compared between the two stocks.

About Tractor Supply

Tractor Supply Company is an operator of rural lifestyle retail stores in the United States. The Company is focused on supplying the needs of recreational farmers and ranchers and others, as well as tradesmen and small businesses. It is engaged in the retail sale of products that support the rural lifestyle. The Company operates retail stores under the names Tractor Supply Company, Del’s Feed & Farm Supply and Petsense, and operates Websites under the names TractorSupply.com and Petsense.com. The Company’s selection of merchandise consists of various product categories, including equine, livestock, pet and small animal products; hardware, truck, towing and tool products; seasonal products, including heating, lawn and garden items, power equipment, gifts and toys; work/recreational clothing and footwear, and maintenance products for agricultural and rural use. Its brands include 4health, JobSmart, Bit & Bridle, Paws & Claws, Blue Mountain, Redstone, Dumor, Equistages and Royal Wing.

About Cabela’s

Cabela’s Incorporated is an omni-channel retailer of hunting, fishing, camping, shooting sports and related outdoor merchandise. The Company offers its customers a selection of national and regional brand products, including its Cabela’s brand. The Company’s segments include Merchandising and Financial Services. The Merchandising segment sells products and services through the Company’s retail stores, its e-commerce Websites (Cabelas.com and Cabelas.ca), and its catalogs. The United States merchandising and Canada merchandising operating segments have been aggregated into its Merchandising segment. The Financial Services segment issues co-branded credit cards, which are available through all of its channels. The Company’s product assortment includes merchandise and equipment for hunting, fishing, marine use, camping, and recreational sport shooting, along with casual and outdoor apparel and footwear, optics, vehicle accessories, and gifts and home furnishings with an outdoor theme.

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