Financial Review: GAP (GAP) & Its Competitors

GAP (NYSE:GAP) is one of 15 publicly-traded companies in the “Family clothing stores” industry, but how does it contrast to its peers? We will compare GAP to similar businesses based on the strength of its institutional ownership, valuation, analyst recommendations, risk, earnings, dividends and profitability.

Dividends

GAP pays an annual dividend of $0.60 per share and has a dividend yield of 2.7%. GAP pays out -2.2% of its earnings in the form of a dividend. As a group, “Family clothing stores” companies pay a dividend yield of 1.4% and pay out -173.8% of their earnings in the form of a dividend.

Insider & Institutional Ownership

73.0% of shares of all “Family clothing stores” companies are held by institutional investors. 12.5% of shares of all “Family clothing stores” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares GAP and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GAP	5.05%	28.89%	6.92%
GAP Competitors	3.12%	-376.16%	6.89%

Valuation and Earnings

This table compares GAP and its peers revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
GAP	$15.17 billion	$502.00 million	-0.81
GAP Competitors	$10.59 billion	$637.10 million	10.72

GAP has higher revenue, but lower earnings than its peers. GAP is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a breakdown of current recommendations for GAP and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAP	0	3	0	0	2.00
GAP Competitors	359	2138	2392	31	2.43

GAP currently has a consensus target price of $27.00, suggesting a potential upside of 22.50%. As a group, “Family clothing stores” companies have a potential upside of 10.73%. Given GAP’s higher probable upside, equities analysts clearly believe GAP is more favorable than its peers.

Risk and Volatility

GAP has a beta of 2.35, meaning that its share price is 135% more volatile than the S&P 500. Comparatively, GAP’s peers have a beta of 2.18, meaning that their average share price is 118% more volatile than the S&P 500.

Summary

GAP peers beat GAP on 8 of the 15 factors compared.

GAP Company Profile

The Gap, Inc. operates as an apparel retail company. The company offers apparel, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, and Athleta brands. Its products include adult apparel and accessories; and fitness and lifestyle products for use in yoga, training, sports, travel, and everyday activities for women and girls. The company offers its products through company-operated stores, franchise stores, websites, and third-party arrangements. It has franchise agreements to operate Old Navy, Gap, Banana Republic, and Athleta stores and websites in Asia, Europe, Latin America, the Middle East, and Africa. The Gap, Inc. was incorporated in 1969 and is headquartered in San Francisco, California.