Critical Analysis: Ross Stores (ROST) and Its Competitors

Ross Stores (NASDAQ:ROST – Get Free Report) is one of 286 publicly-traded companies in the “Specialty Retail” industry, but how does it compare to its rivals? We will compare Ross Stores to similar businesses based on the strength of its valuation, profitability, dividends, risk, earnings, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

86.9% of Ross Stores shares are held by institutional investors. Comparatively, 51.6% of shares of all “Specialty Retail” companies are held by institutional investors. 2.1% of Ross Stores shares are held by insiders. Comparatively, 21.1% of shares of all “Specialty Retail” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Ross Stores pays an annual dividend of $1.78 per share and has a dividend yield of 0.7%. Ross Stores pays out 24.9% of its earnings in the form of a dividend. As a group, “Specialty Retail” companies pay a dividend yield of 2.0% and pay out 35.8% of their earnings in the form of a dividend. Ross Stores has increased its dividend for 6 consecutive years.

Volatility and Risk

Ross Stores has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, Ross Stores’ rivals have a beta of 1.77, meaning that their average stock price is 77% more volatile than the S&P 500.

Profitability

This table compares Ross Stores and its rivals’ net margins, return on equity and return on assets.

Valuation and Earnings

This table compares Ross Stores and its rivals revenue, earnings per share and valuation.

Ross Stores has higher revenue and earnings than its rivals. Ross Stores is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Ross Stores and its rivals, as reported by MarketBeat.

Ross Stores currently has a consensus price target of $239.12, suggesting a potential downside of 2.30%. As a group, “Specialty Retail” companies have a potential upside of 10.51%. Given Ross Stores’ rivals higher possible upside, analysts clearly believe Ross Stores has less favorable growth aspects than its rivals.

Summary

Ross Stores beats its rivals on 10 of the 15 factors compared.

Ross Stores Company Profile

(Get Free Report)

Ross Stores, Inc., together with its subsidiaries, operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd’s DISCOUNTS brand names in the United States. Its stores primarily offer apparel, accessories, footwear, and home fashions. The company’s Ross Dress for Less stores sell its products at department and specialty stores to middle income households; and dd’s DISCOUNTS stores sell its products at department and discount stores for households with moderate income. Ross Stores, Inc. was incorporated in 1957 and is headquartered in Dublin, California.