Winmark (NASDAQ: WINA) and Michaels Companies (NASDAQ:MIK) are both retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.
Winmark pays an annual dividend of $0.44 per share and has a dividend yield of 0.3%. Michaels Companies does not pay a dividend. Winmark pays out 7.7% of its earnings in the form of a dividend.
Risk & Volatility
Winmark has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500. Comparatively, Michaels Companies has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500.
Valuation & Earnings
This table compares Winmark and Michaels Companies’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Winmark||$69.75 million||7.31||$24.56 million||$5.70||23.25|
|Michaels Companies||$5.20 billion||0.75||$378.15 million||$1.96||10.94|
Michaels Companies has higher revenue and earnings than Winmark. Michaels Companies is trading at a lower price-to-earnings ratio than Winmark, indicating that it is currently the more affordable of the two stocks.
This table compares Winmark and Michaels Companies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
49.3% of Winmark shares are held by institutional investors. 30.9% of Winmark shares are held by company insiders. Comparatively, 1.3% of Michaels Companies shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
This is a summary of recent ratings and target prices for Winmark and Michaels Companies, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Michaels Companies has a consensus price target of $25.38, suggesting a potential upside of 18.35%. Given Michaels Companies’ higher possible upside, analysts clearly believe Michaels Companies is more favorable than Winmark.
Winmark beats Michaels Companies on 8 of the 15 factors compared between the two stocks.
Winmark Company Profile
Winmark Corporation is a franchisor of five retail store concepts that buy, sell and trade gently used merchandise. The Company operates through two business segments: franchising and leasing. The franchising segment franchises value-oriented retail store concepts that buy, sell, trade and consign merchandise. The leasing segment includes Winmark Capital Corporation, its middle-market equipment leasing business and Wirth Business Credit, Inc., its small-ticket financing business. As of December 31, 2016, the Company had 1,186 franchised stores across the United States and Canada. The Company operates a middle-market equipment leasing business through its subsidiary, Winmark Capital Corporation. Its middle-market leasing business serves large and medium-sized businesses and focuses on technology-based assets. Additionally, the Company operates a small-ticket financing business through its subsidiary, Wirth Business Credit, Inc.
Michaels Companies Company Profile
The Michaels Companies, Inc. (Michaels) is an arts and crafts specialty retailer in North America. The Company’s segments include Michaels-U.S., Michaels-Canada, Aaron Brothers, Pat Catan’s and Darice. As of January 28, 2017, the Company operated 1,223 Michaels retail stores in 49 states and Canada, with approximately 18,000 average square feet of selling space per store. It operated 109 Aaron Brothers stores in nine states, with approximately 5,500 average square feet of selling space and 35 Pat Catan’s stores in five states, with approximately 32,000 average square feet of selling space, as of January 28, 2017. The Company also operates an international wholesale business under the Darice brand name. The Company’s stores purchase custom frames, framing supplies and mats from its framing operation and subsidiary, Artistree, Inc. (Artistree), which consists of a manufacturing facility and four regional processing centers.
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