Roundy's (NYSE: RNDY) and Etsy (NASDAQ:ETSY) are both cyclical consumer goods & services companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.

Profitability

This table compares Roundy's and Etsy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Roundy's -0.89% N/A -3.14%
Etsy 3.77% 9.19% 5.32%

Earnings and Valuation

This table compares Roundy's and Etsy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Roundy's N/A N/A N/A ($0.06) -60.00
Etsy $364.97 million 6.84 -$29.90 million $0.12 170.83

Roundy's has higher earnings, but lower revenue than Etsy. Roundy's is trading at a lower price-to-earnings ratio than Etsy, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Roundy's has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, Etsy has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500.

Institutional & Insider Ownership

74.4% of Etsy shares are held by institutional investors. 4.0% of Etsy shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for Roundy's and Etsy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Roundy's 0 0 0 0 N/A
Etsy 0 10 3 0 2.23

Etsy has a consensus price target of $15.33, suggesting a potential downside of 25.20%. Given Etsy’s higher possible upside, analysts clearly believe Etsy is more favorable than Roundy's.

Summary

Etsy beats Roundy's on 10 of the 10 factors compared between the two stocks.

About Roundy's

Roundy’s, Inc. is a Midwest supermarket chain. The Company offers a range of products, stocking around 45,000 different items. Its stores sell nationally advertised brands, as well as products under the Roundy’s own-brand labels. Its products are classified into non-perishable, perishable and non-food. Non-perishable food categories include grocery, frozen and dairy products. Perishable categories include produce, meat, seafood, deli, bakery and floral. Non-food includes general merchandise, health and beauty care, pharmacy and alcohol. It classifies products into primary categories, including grocery, frozen and dairy; produce; meat and seafood; bakery; deli, cheese and prepared foods; floral; general merchandise; alcohol; pharmacy; and health and beauty care. Its retail operations consists of around 148 grocery stores, with 119 stores in Wisconsin operating under the Pick ‘n Save, Copps and Metro Market banners and 29 stores in Illinois operating under the Mariano’s banner.

About Etsy

Etsy, Inc. (Etsy) operates a marketplace where people around the world connect, both online and offline, to make, sell and buy goods. The Company offers a range of seller services and tools that help entrepreneurs start, grow and manage their businesses. The Company’s community includes Etsy sellers, Etsy buyers, Etsy employees, its partners and investors. As of December 31, 2016, its platform connected 1.7 million active Etsy sellers and 28.6 million active Etsy buyers. Etsy sellers join its community to participate in its markets to express their creativity. Etsy sellers range from hobbyists to professional merchants, and have a range of personal and professional goals. Its supports a group of artists, makers, designers and collectors from around the world. Its services platform includes seller services, seller tools and education. The Company’s seller services include Direct Checkout, Promoted Listings, Shipping Labels and Pattern by Etsy.

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