Financial Analysis: Roundy's (RNDY) vs. Five Below (FIVE)

Roundy's (NYSE: RNDY) and Five Below (NASDAQ:FIVE) are both department stores – nec companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Roundy's N/A N/A N/A ($0.06) -60.00
Five Below $1.00 billion 3.20 $71.84 million $1.45 40.02

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Roundy's and Five Below, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Roundy's 0 0 0 0 N/A
Five Below 0 6 10 0 2.63

Five Below has a consensus price target of $56.62, suggesting a potential downside of 2.44%. Given Five Below’s higher possible upside, analysts plainly believe Five Below is more favorable than Roundy's.

Volatility and Risk

Roundy's has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, Five Below has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500.

Profitability

This table compares Roundy's and Five Below’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%
Five Below 7.29% 24.37% 15.35%

Summary

Five Below beats Roundy's on 7 of the 8 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 Five Below

Five Below, Inc. is a specialty retailer offering a range of merchandise for teen and pre-teen customer. The Company offers an assortment of products, including select brands and licensed merchandise across a range of categories, including Style, Room, Sports, Tech, Crafts, Party, Candy and Now. Its product groups include leisure, fashion and home, and party and snack. Its Leisure includes items, such as sporting goods, games, toys, tech, books, electronic accessories, and arts and crafts. Its Fashion and home includes items, such as personal accessories, attitude t-shirts, beauty offerings, home goods and storage options. Its Party and snack includes items, such as party and seasonal goods, greeting cards, candy and other snacks, and beverages. The Company operated 522 locations across over 31 states throughout the Northeast, South and Midwest regions of the United States, as of January 29, 2017. Its typical store featured 4,000 stock-keeping units (SKUs), as of January 29, 2017.

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