Head-To-Head Comparison: Aaron’s, (AAN) vs. Systemax (NYSE:SYX)

Aaron’s, (NYSE: AAN) and Systemax (NYSE:SYX) are both retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, risk, analyst recommendations, valuation, institutional ownership and profitabiliy.

Earnings and Valuation

This table compares Aaron’s, and Systemax’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Aaron’s, $3.22 billion 0.98 $477.02 million $1.95 22.97
Systemax $1.71 billion 0.50 $41.70 million ($0.35) -65.51

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

Analyst Recommendations

This is a summary of recent ratings and target prices for Aaron’s, and Systemax, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aaron’s, 0 3 5 0 2.63
Systemax 0 0 1 0 3.00

Aaron’s, currently has a consensus target price of $42.58, indicating a potential downside of 4.95%. Systemax has a consensus target price of $31.00, indicating a potential upside of 35.19%. Given Systemax’s stronger consensus rating and higher probable upside, analysts clearly believe Systemax is more favorable than Aaron’s, .

Dividends

Aaron’s, pays an annual dividend of $0.11 per share and has a dividend yield of 0.2%. Systemax pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. Aaron’s, pays out 5.6% of its earnings in the form of a dividend. Systemax pays out -114.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Systemax has increased its dividend for 10 consecutive years. Systemax is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Aaron’s, and Systemax’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aaron’s, 4.36% 12.00% 6.94%
Systemax -0.87% 12.27% 5.14%

Risk & Volatility

Aaron’s, has a beta of 0.17, meaning that its share price is 83% less volatile than the S&P 500. Comparatively, Systemax has a beta of 0.23, meaning that its share price is 77% less volatile than the S&P 500.

Institutional & Insider Ownership

99.2% of Aaron’s, shares are owned by institutional investors. Comparatively, 24.7% of Systemax shares are owned by institutional investors. 1.9% of Aaron’s, shares are owned by insiders. Comparatively, 69.6% of Systemax shares are owned 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.

Summary

Systemax beats Aaron’s, on 9 of the 17 factors compared between the two stocks.

About Aaron’s,

Aaron’s, Inc. (Aaron’s) is an omnichannel provider of lease-purchase solutions. The Company engages in the sales and lease ownership and specialty retailing of furniture, consumer electronics, home appliances and accessories through its Company-operated and franchised stores in Canada, as well as its e-commerce platform, Aarons.com. Its segments include Sales and Lease Ownership, Progressive Finance Holdings, LLC (Progressive), Dent-A-Med, Inc., doing business as the HELPcard (DAMI), Franchise and Manufacturing. Its stores carry brands, such as Samsung, Frigidaire, Hewlett-Packard, LG, Whirlpool, Simmons, Philips, Ashley and Magnavox. As of December 31, 2016, it had 1,864 Aaron’s stores, consisted of 1,165 Company-operated stores in 28 states, the District of Columbia and Canada, and 699 independently-owned franchised stores in 46 states and Canada. It owns trademarks and trade names used in business, including Progressive, Dent-A-Med, the HELPcard and Woodhaven Furniture Industries.

About Systemax

Systemax Inc. is a direct marketer of brand name and private label products. The Company’s segments are Industrial Products Group (IPG), EMEA Technology Products Group (EMEA), and Corporate and Other (Corporate). The IPG segment sells an array of maintenance, repair and operational (MRO) products, which are marketed in North America. The Company offers a selection of products that are manufactured for its own design and marketed under the trademarks: Global, GlobalIndustrial.com, Nexel Relius, Paramount and Interion. EMEA sells products categorized as Information and Communications Technology (ICT) and Consumer Electronics (CE), as well as related technical services, such as configuration, implementation, network security, and other technical services. CE products include television and video; audio; cameras and surveillance; Global Positioning System (GPS); cell phones; video games, and home and electronics accessories.

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