Contrasting Kohl’s (NYSE:KSS) & MercadoLibre (NASDAQ:MELI)

MercadoLibre (NASDAQ:MELI) and Kohl’s (NYSE:KSS) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Institutional & Insider Ownership

87.6% of MercadoLibre shares are owned by institutional investors. Comparatively, 98.0% of Kohl’s shares are owned by institutional investors. 0.3% of MercadoLibre shares are owned by insiders. Comparatively, 1.5% of Kohl’s shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for MercadoLibre and Kohl’s, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MercadoLibre	0	6	11	0	2.65
Kohl’s	6	9	1	0	1.69

MercadoLibre presently has a consensus target price of $2,272.00, suggesting a potential upside of 27.10%. Kohl’s has a consensus target price of $15.31, suggesting a potential downside of 20.36%. Given MercadoLibre’s stronger consensus rating and higher possible upside, analysts plainly believe MercadoLibre is more favorable than Kohl’s.

Earnings & Valuation

This table compares MercadoLibre and Kohl’s”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MercadoLibre	$28.89 billion	3.14	$2.00 billion	$36.77	48.61
Kohl’s	$15.53 billion	0.14	$272.00 million	$2.36	8.14

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

Volatility & Risk

MercadoLibre has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500. Comparatively, Kohl’s has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500.

Profitability

This table compares MercadoLibre and Kohl’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MercadoLibre	5.30%	26.54%	4.19%
Kohl’s	1.76%	4.67%	1.38%

Summary

MercadoLibre beats Kohl’s on 11 of the 14 factors compared between the two stocks.

About MercadoLibre

MercadoLibre, Inc. operates online commerce platforms in the United States. It operates Mercado Libre Marketplace, an automated online commerce platform that enables businesses, merchants, and individuals to list merchandise and conduct sales and purchases digitally; and Mercado Pago FinTech platform, a financial technology solution platform, which facilitates transactions on and off its marketplaces by providing a mechanism that allows its users to send and receive payments online, as well as allows users to transfer money through their websites or on the apps. The company also offers Mercado Fondo that allows users to invest funds deposited in their Mercado Pago accounts; Mercado Credito, which extends loans to certain merchants and consumers; and Mercado Envios logistics solution that enables sellers on its platform to utilize third-party carriers and other logistics service providers, as well as fulfillment and warehousing services for sellers. In addition, it provides Mercado Libre Classifieds, an online classified listing service, where users can list and purchase motor vehicles, real estate, and services; Mercado Ads, an advertising platform, which enables large retailers and brands to promote their products and services on the web; and Mercado Shops, an online storefronts solution that enables users to set-up, manage, and promote their own digital stores. The company was incorporated in 1999 and is headquartered in Montevideo, Uruguay.

About Kohl’s

Kohl’s Corporation operates as an omnichannel retailer in the United States. It offers branded apparel, footwear, accessories, beauty, and home products through its stores and website. The company provides its products primarily under the brand names of Croft & Barrow, Jumping Beans, SO, Sonoma Goods for Life, and Tek Gear, as well as Food Network, LC Lauren Conrad, Nine West, and Simply Vera Vera Wang. Kohl’s Corporation was founded in 1988 and is headquartered in Menomonee Falls, Wisconsin.