Staples (NASDAQ: SPLS) and Coastal Contacts (NASDAQ:COA) are both cyclical consumer goods & services companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.

Profitability

This table compares Staples and Coastal Contacts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Staples 1.61% 7.49% 3.33%
Coastal Contacts N/A N/A N/A

Earnings and Valuation

This table compares Staples and Coastal Contacts’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Staples N/A N/A N/A ($0.38) -26.97
Coastal Contacts N/A N/A N/A ($0.48) -23.52

Staples is trading at a lower price-to-earnings ratio than Coastal Contacts, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Staples and Coastal Contacts, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Staples 0 5 1 0 2.17
Coastal Contacts 0 0 0 0 N/A

Staples currently has a consensus target price of $8.85, suggesting a potential downside of 13.66%. Given Staples’ higher possible upside, analysts clearly believe Staples is more favorable than Coastal Contacts.

Insider & Institutional Ownership

85.6% of Staples shares are owned by institutional investors. 0.7% of Staples shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Staples pays an annual dividend of $0.48 per share and has a dividend yield of 4.7%. Coastal Contacts does not pay a dividend. Staples pays out -126.3% of its earnings in the form of a dividend.

Summary

Staples beats Coastal Contacts on 10 of the 10 factors compared between the two stocks.

About Staples

Staples, Inc. (Staples) is a provider of products and services that serve the needs of business customers and consumers. The Company offers a range of print and marketing and technology services. The Company’s segments include North American Delivery, North American Retail and Other. The North American Delivery segment consists of the United States and Canadian businesses, including Staples Business Advantage, staples.com, staples.ca, and quill.com, that sell and deliver products and services primarily to businesses. The North American Retail segment includes its retail stores in the United States and Canada. As of January 28, 2017, its North American Retail segment consisted of 1,255 stores in the United States and 304 stores in Canada. The Company has other businesses in Australia, South America and Asia. Staples Australia serves primarily contract and government customers in Australia and New Zealand. The Company also has operations in China, Argentina, Taiwan and Brazil.

About Coastal Contacts

Coastal Contacts Inc. is an online retailer of eyewear serving markets in North America, Europe and Asia Pacific. The Company operates in two primary product segments: contact lenses and glasses. The Company has approximately nine stores in Canada and Sweden. It sells contact lenses manufactured by multinational companies, such as Vistakon (a division of Johnson and Johnson Vision Care Inc.), Alcon, Inc., Bausch & Lomb Inc. and Coopervision Inc. Its products are offered for sale by telephone, e9 mail, through its Websites, which include www.ClearlyContacts.ca, www.ClearlyContacts.com.au, www.ClearlyContacts.co.nz, www.LensWay.se, www.LensWay.fi, www.LensWay.nl, www.LensWay.no, www.LensWay.co.uk, and www.ContactSan.com or at one of its nine physical retail locations. In April 2014, the Company announced that Essilor International (Compagnie Generale d’Optique), S.A. (Essilor) has indirectly acquired the interest of Coastal.com.

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