GAP (GAP) and Its Rivals Critical Contrast

GAP (NYSE:GAP) is one of 285 public companies in the “Specialty Retail” industry, but how does it compare to its peers? We will compare GAP to related companies based on the strength of its profitability, valuation, analyst recommendations, dividends, earnings, institutional ownership and risk.

Analyst Recommendations

This is a summary of recent ratings and price targets for GAP and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAP	1	12	6	2	2.43
GAP Competitors	3663	15557	21591	586	2.46

GAP presently has a consensus target price of $27.07, indicating a potential upside of 21.74%. As a group, “Specialty Retail” companies have a potential upside of 7.80%. Given GAP’s higher probable upside, research analysts plainly believe GAP is more favorable than its peers.

Profitability

This table compares GAP and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GAP	8.14%	19.72%	5.94%
GAP Competitors	-3.67%	-14.10%	3.17%

Earnings & Valuation

This table compares GAP and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
GAP	$15.37 billion	$816.00 million	6.64
GAP Competitors	$7.06 billion	$386.47 million	32.04

GAP has higher revenue and earnings than its peers. GAP is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

GAP pays an annual dividend of $0.70 per share and has a dividend yield of 3.1%. GAP pays out 20.9% of its earnings in the form of a dividend. As a group, “Specialty Retail” companies pay a dividend yield of 2.1% and pay out 35.6% of their earnings in the form of a dividend. GAP has raised its dividend for 1 consecutive years. GAP is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

58.8% of GAP shares are held by institutional investors. Comparatively, 51.6% of shares of all “Specialty Retail” companies are held by institutional investors. 31.0% of GAP shares are held by insiders. Comparatively, 20.5% of shares of all “Specialty Retail” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

GAP has a beta of 2.05, meaning that its share price is 105% more volatile than the S&P 500. Comparatively, GAP’s peers have a beta of 1.66, meaning that their average share price is 66% more volatile than the S&P 500.

Summary

GAP beats its peers on 12 of the 15 factors compared.

About GAP

Gap, Inc. operates as a global apparel retail company, which offers clothing, apparel, accessories, and personal care products for men, women, and children. The firm operates through the following segments: Gap Global, Old Navy Global, Banana Republic Global, Athleta, and Other. The Gap Global segment includes apparel and accessories for men and women under the Gap brand, along with the GapKids, BabyGap, GapMaternity, GapBody, and GapFit collections. The Old Navy Global segment offers clothing and accessories for adults and children. The Banana Republic Global segment provides clothing, eyewear, jewelry, shoes, handbags, and fragrances. The Athleta segment offers fitness apparel for women. The company founded by Donald G. Fisher and Doris F. Fisher in July 1969 and is headquartered in San Francisco, CA.