Critical Review: Sector 5 (OTCMKTS:SFIV) vs. Best Buy (NYSE:BBY)

Sector 5 (OTCMKTS:SFIV) and Best Buy (NYSE:BBY) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, dividends, valuation, earnings, analyst recommendations and profitability.

Analyst Ratings

This is a summary of recent recommendations for Sector 5 and Best Buy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sector 5	0	0	0	0	0.00
Best Buy	1	10	9	0	2.40

Best Buy has a consensus target price of $86.11, suggesting a potential upside of 26.28%. Given Best Buy’s stronger consensus rating and higher probable upside, analysts clearly believe Best Buy is more favorable than Sector 5.

Insider and Institutional Ownership

81.0% of Best Buy shares are owned by institutional investors. 0.5% of Best Buy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Sector 5 and Best Buy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sector 5	N/A	N/A	N/A	N/A	N/A
Best Buy	$41.53 billion	0.35	$927.00 million	$4.09	16.67

Best Buy has higher revenue and earnings than Sector 5.

Profitability

This table compares Sector 5 and Best Buy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sector 5	N/A	N/A	N/A
Best Buy	2.13%	46.40%	8.86%

Summary

Best Buy beats Sector 5 on 9 of the 9 factors compared between the two stocks.

About Sector 5

Sector 5, Inc. focuses on selling branded electronic products for the educational and consumer electronics markets in North America. It focuses on the education market utilizing Chrome and Android operating systems utilizing a Google approval Chromebook. The company intends to offer Chromebooks, charging carts wirelessly, electronic whiteboards, large touch screens, classroom speakers, classroom microphones, and Chromebook HDMI connected monitors. Its distribution channel strategy includes B2B, primarily schools, as well as utilization of existing relationships with distributors that have retail channels looking for new products. The company was founded in 2012 and is based in Alexandria, Virginia.

About Best Buy

Best Buy Co., Inc. engages in the retail of technology products in the United States, Canada, and international. Its stores provide computing and mobile phone products, such as desktops, notebooks, and peripherals; mobile phones comprising related mobile network carrier commissions; networking products; tablets covering e-readers; smartwatches; and consumer electronics consisting of digital imaging, health and fitness products, portable audio comprising headphones and portable speakers, and smart home products, as well as home theaters, which includes home theater accessories, soundbars, and televisions. The company's stores also offer appliances, such as dishwashers, laundry, ovens, refrigerators, blenders, coffee makers, vacuums, and personal care; entertainment products consisting of drones, peripherals, movies, and toys, as well as hardware and software, and virtual reality and other software products; and other products, such as baby, food and beverage, luggage, outdoor living, and sporting goods. In addition, it provides delivery, installation, memberships, repair, set-up, technical support, health-related, and warranty-related services. The company offers its products through stores and websites under the Best Buy, Best Buy Ads, Best Buy Business, Best Buy Health, Buy Mobile, CST, Current Health, Geek Squad, Lively, Magnolia, Pacific Kitchen, Home, TechLiquidators, and Yardbird brands, as well as domain names comprising bestbuy.com, currenthealth.com, lively.com, techliquidators.com, yardbird.com, and bestbuy.ca. The company was formerly known as Sound of Music, Inc. Best Buy Co., Inc. was incorporated in 1966 and is headquartered in Richfield, Minnesota.