Nordstrom (NYSE: JWN) and The Bon-Ton Stores (OTCMKTS:BONT) 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 analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Profitability

This table compares Nordstrom and The Bon-Ton Stores’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nordstrom 3.25% 67.44% 6.72%
The Bon-Ton Stores -3.57% N/A -4.98%

Risk & Volatility

Nordstrom has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, The Bon-Ton Stores has a beta of 3.13, meaning that its share price is 213% more volatile than the S&P 500.

Earnings and Valuation

This table compares Nordstrom and The Bon-Ton Stores’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nordstrom $14.76 billion 0.54 $354.00 million $2.85 16.68
The Bon-Ton Stores $2.67 billion 0.00 -$63.41 million ($4.60) -0.08

Nordstrom has higher revenue and earnings than The Bon-Ton Stores. The Bon-Ton Stores is trading at a lower price-to-earnings ratio than Nordstrom, indicating that it is currently the more affordable of the two stocks.

Dividends

Nordstrom pays an annual dividend of $1.48 per share and has a dividend yield of 3.1%. The Bon-Ton Stores does not pay a dividend. Nordstrom pays out 51.9% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current ratings and price targets for Nordstrom and The Bon-Ton Stores, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nordstrom 3 13 7 0 2.17
The Bon-Ton Stores 0 0 0 0 N/A

Nordstrom presently has a consensus target price of $45.65, indicating a potential downside of 3.98%. Given Nordstrom’s higher possible upside, analysts plainly believe Nordstrom is more favorable than The Bon-Ton Stores.

Institutional & Insider Ownership

57.6% of Nordstrom shares are held by institutional investors. Comparatively, 16.7% of The Bon-Ton Stores shares are held by institutional investors. 7.3% of Nordstrom shares are held by company insiders. Comparatively, 45.7% of The Bon-Ton Stores shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Nordstrom beats The Bon-Ton Stores on 12 of the 15 factors compared between the two stocks.

About Nordstrom

Nordstrom, Inc. is a fashion specialty retailer in the United States. The Company’s segments include Retail and Credit. As of March 20, 2017, the Company operated 344 the United States stores located in 40 states as well as an e-commerce business. The Company also offers its customers a variety of payment products and services, including credit and debit cards. As of March 20, 2017, the Retail segment included its 117 Nordstrom-branded full-line stores in the United States and Nordstrom.com, 216 off-price Nordstrom Rack stores, five Canada full-line stores, Nordstromrack.com/HauteLook, seven Trunk Club clubhouses and TrunkClub.com, two Jeffrey boutiques and two clearance stores that operate under the name Last Chance. The Company, through Credit segment, allows its customers to access a range of payment products and services, including a Nordstrom-branded private label card, approximately two Nordstrom-branded Visa credit cards and a debit card for Nordstrom purchases.

About The Bon-Ton Stores

The Bon-Ton Stores, Inc. is a department store operator. The Company operates through two segments: stores and eCommerce (its Internet Websites). The Company offers a range of brand-name fashion apparel and accessories for women, men and children. It operates approximately 270 stores in over 26 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates, encompassing a total of approximately 25 million square feet. Its nationally distributed brand assortment includes a range of labels in the apparel, accessories, footwear, cosmetics and home furnishings industries, such as Anne Klein, Calvin Klein, Carters, Chaps, Clarks, Clinique, Coach, Estee Lauder, Fossil, Free People, Frye, Jessica Simpson and Vince Camuto. Its private brand portfolio includes Laura Ashley, Ruff Hewn, Relativity and Casa by Victor Alfaro.

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