Two Top Picks Amongst US Retailers: Wal-Mart Stores, Inc. (WMT) and More

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Metric Comparison

J.C. Penney shares it retail market share with Wal-Mart, Macy’s and Sears Holdings Corporation (NASDAQ:SHLD).

Company P/E Debt/Equity Gross Margin
JC Penney (NYSE:JCP) -9.05x 85% 32.9%
Wal-Mart 12.25x 125% 40.37%
Macy’s 14.09x 83% 78%
Sears Holdings -10.48x 104% 26.04%

From the mentioned peers, J.C. Penney and Sears Holdings have been bleeding pretty badly. This might interest contrarians, but the risk averse should certainly stay distant. Wal-Mart and Macy’s appear to be attractive, with high gross margins and seemingly undervalued stock prices. Analysts estimate their annual EPS growth to average around 9.26% (Wal-Mart) and 11.62% (Macy’s).

Conclusion

In my honest opinion, J.C. Penney has to do more than just comparative pricing and cost cuts. It needs positive catalysts to grow. That said, the fight for “Martha Stewart” is on, and any positive court ruling could power up its stock. In my opinion, risk averse investors should instead look to invest in Macy’s and Wal-Mart for their growth prospects.

The article Two Top Picks Amongst US Retailers originally appeared on Fool.com and is written by Piyush Arora.

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