A Growing and Profitable Debt-Free Retailer: Bed Bath & Beyond Inc. (BBBY)

Valuation

Valuation-wise, Macy’s is the cheapest compared to Bed Bath & Beyond and Target. With the trading price of $39.10 per share, the total market cap is $15.46 billion. Macy’s is valued at 5.9 EV/EBITDA. Target seems to be the most expensive with 7.7 EV/EBITDA. It is also the biggest company among the three with $40.16 billion in market cap.

Bed Bath & Beyond, with a market cap of $12.8 billion, is valued at 6.75 EV/EBITDA. Bed Bath & Beyond looks attractive with the highest operating margin of 16%, while the operating margins of Macy’s and Target are only 9% and 7%, respectively. Furthermore, it has kept returning cash to shareholders in the form of share buybacks.

Foolish Bottom Line

With a debt-free operation, a high operating margin, a reasonable valuation and an increasing amount of share buybacks, Bed Bath & Beyond is a decent stock for long-term investors at its current price.

The article A Growing and Profitable Debt-Free Retailer originally appeared on Fool.com and is written by Anh HOANG.

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