Critical Comparison: Ross Stores (NASDAQ:ROST) and Birks Group (NYSE:BGI)

Ross Stores (NASDAQ:ROST) and Birks Group (NYSE:BGI) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Insider and Institutional Ownership

86.9% of Ross Stores shares are held by institutional investors. Comparatively, 0.2% of Birks Group shares are held by institutional investors. 2.1% of Ross Stores shares are held by insiders. Comparatively, 78.8% of Birks Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Ross Stores and Birks Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ross Stores	0	5	15	1	2.81
Birks Group	0	0	0	0	0.00

Ross Stores currently has a consensus target price of $233.18, indicating a potential downside of 7.12%. Given Ross Stores’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Ross Stores is more favorable than Birks Group.

Valuation and Earnings

This table compares Ross Stores and Birks Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ross Stores	$22.75 billion	3.54	$2.15 billion	$7.16	35.06
Birks Group	$205.42 million	0.05	-$3.43 million	N/A	N/A

Ross Stores has higher revenue and earnings than Birks Group.

Profitability

This table compares Ross Stores and Birks Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ross Stores	9.74%	38.42%	15.18%
Birks Group	N/A	N/A	N/A

Risk & Volatility

Ross Stores has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, Birks Group has a beta of 0.34, indicating that its share price is 66% less volatile than the S&P 500.

Summary

Ross Stores beats Birks Group on 12 of the 13 factors compared between the two stocks.

About Ross Stores

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.

About Birks Group

Birks Group Inc. designs, develops, manufactures, and retails fine jewelry, timepieces, sterling and plated silverware, and gifts in the United States and Canada. The company operates through two segments, Retail and Other. It offers various merchandise, including designer jewelry, diamonds, gemstone and precious metal jewelry, rings, wedding bands, earrings, bracelets, necklaces, precious gemstones, gold jewelry, pearls, and giftware. It operates stores under the Maison Birks, Brinkhaus, Breitling, and Graff and Patek Philippe brands. It also engages in the retail and wholesale of fine jewelry collections through Mappin & Webb and Goldsmiths stores, as well as through e-commerce platforms; and gold exchange business. The company was formerly known as Birks & Mayors Inc. and changed its name to Birks Group Inc. in September 2013. Birks Group Inc. was founded in 1879 and is headquartered in Montreal, Canada.