Comparing Five Below (NASDAQ:FIVE) & ODP (NASDAQ:ODP)

ODP (NASDAQ:ODP) and Five Below (NASDAQ:FIVE) are both retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Risk and Volatility

ODP has a beta of 1.43, indicating that its stock price is 43% more volatile than the S&P 500. Comparatively, Five Below has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500.

Earnings and Valuation

This table compares ODP and Five Below”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ODP	$6.69 billion	0.13	-$3.00 million	$0.66	42.26
Five Below	$4.23 billion	2.03	$253.61 million	$4.94	31.57

Five Below has lower revenue, but higher earnings than ODP. Five Below is trading at a lower price-to-earnings ratio than ODP, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares ODP and Five Below’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ODP	0.39%	11.22%	2.58%
Five Below	6.45%	17.13%	7.01%

Institutional and Insider Ownership

99.6% of ODP shares are owned by institutional investors. 4.6% of ODP shares are owned by company insiders. Comparatively, 1.9% of Five Below shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for ODP and Five Below, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ODP	1	2	0	0	1.67
Five Below	1	11	10	1	2.48

ODP presently has a consensus price target of $19.00, suggesting a potential downside of 31.88%. Five Below has a consensus price target of $152.84, suggesting a potential downside of 1.99%. Given Five Below’s stronger consensus rating and higher probable upside, analysts clearly believe Five Below is more favorable than ODP.

Summary

Five Below beats ODP on 10 of the 15 factors compared between the two stocks.

About ODP

The ODP Corporation provides business services and supplies, products, and digital workplace technology solutions for small, medium, and enterprise businesses in the United States, Puerto Rico, and the U.S. Virgin Islands. The company operates through four divisions: ODP Business Solutions, Office Depot, Veyer, and Varis. The ODP Business Solutions division offers adjacency products, including cleaning, janitorial, and breakroom supplies, office furniture, technology products; and copy and print services through sales force, catalogs, telesales, and through Internet websites. This segment also engages in office supply distribution business. The Office Depot division sells office supplies, technology products and solutions, business machines and related supplies, cleaning, breakroom and facilities products, personal protective equipment, and office furniture; and offers business services, including copying, printing, digital imaging, mailing, shipping, and technology support services through a fully integrated omni-channel platform of 980 Office Depot and OfficeMax retail stores, and through www.officedepot.com. The Veyer division engages in supply chain, distribution, procurement, and global sourcing operations. The Varis division operates tech-enabled B2B indirect procurement marketplace, where buyers and suppliers to transact through the platform's consumer-like buying experience, advanced spend management tools, network of suppliers, and technology capabilities. The company offers its products under various brands, including Office Depot, OfficeMax, and Grand&Toy, as well as others. The ODP Corporation was incorporated in 1986 and is headquartered in Boca Raton, Florida.

About Five Below

Five Below, Inc. operates as a specialty value retailer in the United States. The company offers range of accessories, which includes novelty socks, sunglasses, jewelry, scarves, gloves, hair accessories, athletic tops and bottoms, and t-shirts, as well as nail polish, lip gloss, fragrance, and branded cosmetics; and personalized living space products, such as lamps, posters, frames, fleece blankets, plush items, pillows, candles, incense, lighting, novelty décor, accent furniture, and related items, as well as provides storage options. It provides assortment of sports balls, team sports merchandise, and fitness accessories comprising hand weights, jump ropes, and gym balls; various games, such as board games, puzzles, collectibles, and toys, including remote control; and summer season sports, which includes pool, beach, and outdoor toys, as well as games and accessories. In addition, the company offers accessories for cell phones, tablets, audio, and computers, as well as cases, chargers, headphones, and other related items; and media products including books, video games, and DVDs. It also provides assortment of craft activity kits, and arts and crafts supplies, such as crayons, markers, and stickers; and school products comprising backpacks, fashion notebooks and journals, novelty pens and pencils, and locker accessories. Further, the company offers party products, which includes party goods, decorations, gag gifts, and greeting cards, as well as every day and special occasion merchandise; assortment of classic and novelty candy bars, movie-size box candy, seasonal-related candy, and gum and snack food products, as well as sells chilled drinks through coolers; and provides seasonally specific items used to celebrate and decorate for events. The company was formerly known as Cheap Holdings, Inc. and changed its name to Five Below, Inc. in August 2002. Five Below, Inc. was incorporated in 2002 and is headquartered in Philadelphia, Pennsylvania.