Critical Contrast: GAP (GAP) & The Competition

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

Dividends

GAP pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. 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 1.8% and pay out -53.2% of their earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for GAP and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAP	0	3	0	0	2.00
GAP Competitors	359	2141	2393	31	2.43

GAP currently has a consensus price target of $27.00, indicating a potential upside of 23.85%. As a group, “Family clothing stores” companies have a potential upside of 12.44%. Given GAP’s higher possible upside, equities research analysts plainly believe GAP is more favorable than its rivals.

Profitability

This table compares GAP and its rivals’ 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%

Insider & Institutional Ownership

58.8% of GAP shares are owned by institutional investors. Comparatively, 71.6% of shares of all “Family clothing stores” companies are owned by institutional investors. 31.0% of GAP shares are owned by insiders. Comparatively, 14.3% of shares of all “Family clothing stores” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares GAP and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
GAP	$15.17 billion	$502.00 million	-0.80
GAP Competitors	$10.54 billion	$637.10 million	9.94

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

Risk & Volatility

GAP has a beta of 2.35, suggesting that its stock price is 135% more volatile than the S&P 500. Comparatively, GAP’s rivals have a beta of 1.81, suggesting that their average stock price is 81% more volatile than the S&P 500.

Summary

GAP beats its rivals 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.