Financial Analysis: Walmart de México y Centroamérica (WMMVY) and Five Below (FIVE)

                Walmart de México y Centroamérica (OTCMKTS: WMMVY) and Five Below (NASDAQ:FIVE) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk. 

Dividends

Walmart de México y Centroamérica pays an annual dividend of $0.35 per share and has a dividend yield of 1.4%. Five Below does not pay a dividend. Walmart de México y Centroamérica pays out 35.7% of its earnings in the form of a dividend.

             <strong>Insider & Institutional Ownership</strong>

0.1% of Walmart de México y Centroamérica shares are held by institutional investors. 2.6% of Five Below shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Walmart de México y Centroamérica and Five Below’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Walmart de México y Centroamérica $30.18 billion 1.48 $2.11 billion $0.98 26.16
Five Below $1.28 billion 3.10 $102.45 million $1.79 39.84

Walmart de México y Centroamérica has higher revenue and earnings than Five Below. Walmart de México y Centroamérica is trading at a lower price-to-earnings ratio than Five Below, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and target prices for Walmart de México y Centroamérica and Five Below, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Walmart de México y Centroamérica 0 2 0 0 2.00
Five Below 0 7 9 0 2.56

Five Below has a consensus price target of $65.27, indicating a potential downside of 8.47%. Given Five Below’s stronger consensus rating and higher possible upside, analysts clearly believe Five Below is more favorable than Walmart de México y Centroamérica.

Volatility and Risk

Walmart de México y Centroamérica has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500. Comparatively, Five Below has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Profitability

This table compares Walmart de México y Centroamérica and Five Below’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Walmart de México y Centroamérica 7.01% 22.96% 12.30%
Five Below 8.02% 26.00% 16.40%

Summary

Five Below beats Walmart de México y Centroamérica on 11 of the 16 factors compared between the two stocks.

Walmart de México y Centroamérica Company Profile

Wal-Mart de México, S.A.B. de C.V. owns and operates self-service stores in Mexico and Central America. The company operates discount stores, hypermarkets, supermarkets, membership self-service wholesale stores, and pharmacies. It operates 1,820 Bodega Aurrerá discount stores, 270 Walmart hypermarkets, 94 Superama supermarkets, 162 Sam’s Club membership self-service wholesale stores, and 10 Medimart pharmacies. The company also operates 522 Despensa Familiar and Palí discount stores; 94 Paiz, La Despensa de Don Juan, La Unión, and Más x Menos supermarkets; 133 Bodegas, Maxi Bodega, and Maxi Palí stores; and 29 Walmart hypermarkets in Costa Rica, Guatemala, Honduras, Nicaragua, and El Salvador. In addition, it imports and sells goods; develops properties; and manages real estate companies. The company was founded in 1958 and is headquartered in Mexico City, Mexico. Wal-Mart de México, S.A.B. de C.V. is a subsidiary of Walmart Inc.

Five Below Company Profile

Five Below, Inc. operates as a specialty value retailer in the United States. It offers accessories, including novelty socks, sunglasses, jewelry, scarves, gloves, hair accessories, athletic tops and bottoms, and T-shirts, as well as beauty products comprising nail polish, lip gloss, fragrance, and branded cosmetics; and items used to complete and personalize living space, including glitter lamps, posters, frames, fleece blankets, plush items, pillows, candles, incense, lighting, novelty décor, and related items, as well as provides storage options for the customers room. The company also provides sport balls; team sports merchandise and fitness accessories, such as hand weights, jump ropes, and gym balls; games, including name brand board games, puzzles, collectibles, and toys; and pool, beach and outdoor toys, games, and accessories. In addition, it offers accessories, such as cases, chargers, headphones, and other related items for cell phones, tablet, audio, and computers; books, video games, and DVDs; craft activity kits; arts and crafts supplies that consist of crayons, markers, and stickers; and trend-right items for school comprising backpacks, fashion notebooks and journals, novelty pens and pencils, locker accessories, and everyday name brand items. Further, the company provides party goods, decorations, gag gifts, and greeting cards, as well as every day and special occasion merchandise products; assortment of classic and novelty candy bars, movie-size box candy, seasonal-related candy, and gum and snack food; chilled drinks through coolers; and seasonally-specific items used to celebrate and decorate for events. It primarily serves teen and pre-teen customers. As of February 3, 2018, it operated 625 stores in 32 states. The company was formerly known as Cheap Holdings, Inc. and changed its name to Five Below, Inc. in August 2002. Five Below, Inc. was founded in 2002 and is headquartered in Philadelphia, Pennsylvania.


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