Pier 1 Imports (PIR) vs. Bed Bath & Beyond (BBBY) Critical Contrast

Pier 1 Imports (NYSE: PIR) and Bed Bath & Beyond (NASDAQ:BBBY) are both retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, analyst recommendations, risk, earnings and dividends.

Insider and Institutional Ownership

86.0% of Pier 1 Imports shares are held by institutional investors. Comparatively, 92.5% of Bed Bath & Beyond shares are held by institutional investors. 5.6% of Pier 1 Imports shares are held by insiders. Comparatively, 5.0% of Bed Bath & Beyond shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Pier 1 Imports and Bed Bath & Beyond’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pier 1 Imports 1.82% 13.96% 4.53%
Bed Bath & Beyond 5.22% 24.38% 9.34%

Risk & Volatility

Pier 1 Imports has a beta of 1.7, suggesting that its share price is 70% more volatile than the S&P 500. Comparatively, Bed Bath & Beyond has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Pier 1 Imports and Bed Bath & Beyond, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pier 1 Imports 4 11 2 0 1.88
Bed Bath & Beyond 8 12 1 0 1.67

Pier 1 Imports currently has a consensus price target of $5.90, indicating a potential upside of 34.40%. Bed Bath & Beyond has a consensus price target of $35.38, indicating a potential upside of 22.92%. Given Pier 1 Imports’ stronger consensus rating and higher probable upside, research analysts clearly believe Pier 1 Imports is more favorable than Bed Bath & Beyond.

Dividends

Pier 1 Imports pays an annual dividend of $0.28 per share and has a dividend yield of 6.4%. Bed Bath & Beyond pays an annual dividend of $0.60 per share and has a dividend yield of 2.1%. Pier 1 Imports pays out 68.3% of its earnings in the form of a dividend. Bed Bath & Beyond pays out 13.9% 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. Bed Bath & Beyond has increased its dividend for 4 consecutive years.

Valuation & Earnings

This table compares Pier 1 Imports and Bed Bath & Beyond’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pier 1 Imports $1.82 billion 0.20 $134.14 million $0.41 10.71
Bed Bath & Beyond $12.22 billion 0.33 $1.36 billion $4.33 6.65

Bed Bath & Beyond has higher revenue and earnings than Pier 1 Imports. Bed Bath & Beyond is trading at a lower price-to-earnings ratio than Pier 1 Imports, indicating that it is currently the more affordable of the two stocks.

Summary

Bed Bath & Beyond beats Pier 1 Imports on 10 of the 17 factors compared between the two stocks.

Pier 1 Imports Company Profile

Pier 1 Imports, Inc. is an importer of home decor and furniture. The Company’s operations consist of retail stores and an e-commerce Website conducting business under the name Pier 1 Imports, which sells a range of decorative accessories, furniture, candles, housewares, gifts and seasonal products. The Company’s categories of merchandise include decorative accessories and furniture. The decorative accessories category includes decorative accents and textiles, such as rugs, wall decorations and mirrors, candles, fragrance, gifts and seasonal items. The furniture category includes furniture and furniture cushions to be used in living, dining, office, sunrooms and patios. This merchandise group is generally made of metal or handcrafted natural materials, including rattan, pine, acacia, oak and other woods with either natural, stained, painted or upholstered finishes.

Bed Bath & Beyond Company Profile

Bed Bath & Beyond Inc. is a retailer, which operates under the names Bed Bath & Beyond (BBB), Christmas Tree Shops, Christmas Tree Shops andThat! or andThat! (collectively, CTS), Harmon or Harmon Face Values (collectively, Harmon), buybuy BABY (Baby) and World Market, Cost Plus World Market or Cost Plus (collectively, Cost Plus World Market). The Company operates in two segments: North American Retail and Institutional Sales. The Company sells a range of domestics merchandise and home furnishings. Domestics merchandise includes categories, such as bed linens and related items, bath items and kitchen textiles. Home furnishings include categories, such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables and juvenile products. The Company operates approximately 1,530 stores plus its various Websites, other interactive platforms and distribution facilities.

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