Tractor Supply (NASDAQ:TSCO) vs. Bath & Body Works (NYSE:BBWI) Critical Comparison

Bath & Body Works (NYSE:BBWI) and Tractor Supply (NASDAQ:TSCO) are both retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.

Insider and Institutional Ownership

95.1% of Bath & Body Works shares are owned by institutional investors. Comparatively, 98.7% of Tractor Supply shares are owned by institutional investors. 0.3% of Bath & Body Works shares are owned by insiders. Comparatively, 0.7% of Tractor Supply shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Bath & Body Works and Tractor Supply’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bath & Body Works	9.88%	-48.43%	15.18%
Tractor Supply	7.18%	46.18%	10.62%

Valuation & Earnings

This table compares Bath & Body Works and Tractor Supply”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bath & Body Works	$7.35 billion	0.49	$798.00 million	$3.25	5.38
Tractor Supply	$15.40 billion	1.88	$1.10 billion	$2.08	26.34

Tractor Supply has higher revenue and earnings than Bath & Body Works. Bath & Body Works is trading at a lower price-to-earnings ratio than Tractor Supply, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Bath & Body Works and Tractor Supply, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bath & Body Works	1	12	6	0	2.26
Tractor Supply	0	6	16	0	2.73

Bath & Body Works presently has a consensus target price of $25.17, indicating a potential upside of 43.81%. Tractor Supply has a consensus target price of $63.95, indicating a potential upside of 16.74%. Given Bath & Body Works’ higher possible upside, analysts plainly believe Bath & Body Works is more favorable than Tractor Supply.

Dividends

Bath & Body Works pays an annual dividend of $0.80 per share and has a dividend yield of 4.6%. Tractor Supply pays an annual dividend of $0.92 per share and has a dividend yield of 1.7%. Bath & Body Works pays out 24.6% of its earnings in the form of a dividend. Tractor Supply pays out 44.2% 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. Tractor Supply has raised its dividend for 16 consecutive years. Bath & Body Works is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Bath & Body Works has a beta of 1.53, meaning that its stock price is 53% more volatile than the S&P 500. Comparatively, Tractor Supply has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500.

Summary

Tractor Supply beats Bath & Body Works on 10 of the 17 factors compared between the two stocks.

About Bath & Body Works

Bath & Body Works, Inc. is a specialty retailers and home to America’s Favorite Fragrances, offering a breadth of exclusive fragrances for the body and home, including the selling collections for fine fragrance mist, body lotion and body cream, 3-wick candles, home fragrance diffusers and liquid hand soap. The company was founded by Leslie Herbert Wexner in 1963 and is headquartered in Columbus, OH.

About Tractor Supply

Tractor Supply Company operates as a rural lifestyle retailer in the United States. The company offers various merchandise, including livestock and equine feed and equipment, poultry, fencing, and sprayers and chemicals; food, treats, and equipment for dogs, cats, and other small animals, as well as dog wellness products; seasonal and recreation products comprising tractors and riders, lawn and garden, bird feeding, power equipment, and other recreational products; truck, tool, and hardware products, such as truck accessories, trailers, generators, lubricants, batteries, and hardware and tools; and clothing, gift, and décor products consist of clothing, footwear, toys, snacks, and decorative merchandise. It provides its products under the 4health, Paws & Claws, American Farmworks, Producer's Pride, Bit & Bridle, Red Shed, Blue Mountain, Redstone, C.E. Schmidt, Retriever, Country Lane, Ridgecut, Countyline, Royal Wing, Country Tuff, Strive, Dumor, Traveller, Farm Table, Treeline, Groundwork, TSC Tractor Supply Co, Huskee, Untamed, and JobSmart brand names. The company operates its retail stores under the Tractor Supply Company, Petsense by Tractor Supply, and Orscheln Farm and Home names; and operates websites under the TractorSupply.com and Petsense.com names. It sells its products to recreational farmers, ranchers, and others. Tractor Supply Company was founded in 1938 and is based in Brentwood, Tennessee.