Critical Contrast: Dillard’s (NYSE:DDS) and Ollie’s Bargain Outlet (NASDAQ:OLLI)

Ollie’s Bargain Outlet (NASDAQ:OLLI) and Dillard’s (NYSE:DDS) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, earnings, profitability, analyst recommendations, institutional ownership, valuation and dividends.

Institutional and Insider Ownership

67.2% of Dillard’s shares are owned by institutional investors. 0.7% of Ollie’s Bargain Outlet shares are owned by company insiders. Comparatively, 34.8% of Dillard’s shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Ollie’s Bargain Outlet and Dillard’s, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ollie’s Bargain Outlet	0	4	13	0	2.76
Dillard’s	2	3	0	0	1.60

Ollie’s Bargain Outlet presently has a consensus target price of $103.50, suggesting a potential upside of 11.15%. Dillard’s has a consensus target price of $545.67, suggesting a potential downside of 16.74%. Given Ollie’s Bargain Outlet’s stronger consensus rating and higher possible upside, analysts clearly believe Ollie’s Bargain Outlet is more favorable than Dillard’s.

Valuation & Earnings

This table compares Ollie’s Bargain Outlet and Dillard’s”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ollie’s Bargain Outlet	$2.65 billion	2.09	$240.60 million	$4.48	20.79
Dillard’s	$6.47 billion	1.58	$570.19 million	$43.65	15.01

Dillard’s has higher revenue and earnings than Ollie’s Bargain Outlet. Dillard’s is trading at a lower price-to-earnings ratio than Ollie’s Bargain Outlet, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ollie’s Bargain Outlet and Dillard’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ollie’s Bargain Outlet	9.79%	14.54%	9.23%
Dillard’s	10.48%	31.88%	16.20%

Risk and Volatility

Ollie’s Bargain Outlet has a beta of 0.41, meaning that its stock price is 59% less volatile than the S&P 500. Comparatively, Dillard’s has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500.

Summary

Dillard’s beats Ollie’s Bargain Outlet on 9 of the 14 factors compared between the two stocks.

About Ollie’s Bargain Outlet

Ollie’s Bargain Outlet Holdings, Inc. is a holding company, which engages in the retail of closeouts, excess inventory, and salvage merchandise. It offers overstocks, package changes, manufacturer refurbished goods, and irregulars. The company’s products include housewares, food, books and stationery, bed and bath, floor coverings, electronics and toys. Ollie’s Bargain Outlet Holdings was founded by Mark Butler, Mort Bernstein, Oliver Rosenberg and Harry Coverman on July 29, 1982, and is headquartered in Harrisburg, PA.

About Dillard’s

Dillard’s, Inc. engages in the retail of fashion apparel, cosmetics, and home furnishings, and other consumer goods. It operates through the Retail Operations and Construction segments. The Retail Operations segment comprises sells cosmetics, ladies’ apparel, ladies’ accessories and lingerie, juniors’ and children’s apparel, men’s apparel and accessories, shoes, and home and furniture products. The Construction segment constructs and remodels stores through CDI Contractors, LLC. The company was founded by William Thomas Dillard in 1938 and is headquartered in Little Rock, AR.