Dillard's vs Kohl's Which Is a Better Investment?

Dillard's and Kohl's are two prominent retailers in the United States, each with a long history and established presence in the market. While both companies operate in the same industry, they have distinct business models and target different demographics. Dillard's is known for its high-end, upscale department stores, while Kohl's focuses on providing affordable, value-driven merchandise to a broader customer base. Investors interested in the retail sector may find opportunities in both Dillard's and Kohl's stocks, but should carefully consider the unique strengths and challenges facing each company before making investment decisions.

Dillard's or Kohl's?

When comparing Dillard's and Kohl's, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Dillard's and Kohl's.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Dillard's has a dividend yield of 4.73%, while Kohl's has a dividend yield of 9.8%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Dillard's reports a 5-year dividend growth of 120.61% year and a payout ratio of 54.12%. On the other hand, Kohl's reports a 5-year dividend growth of -3.90% year and a payout ratio of 89.47%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Dillard's P/E ratio at 11.36 and Kohl's's P/E ratio at 6.86. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Dillard's P/B ratio is 2.80 while Kohl's's P/B ratio is 0.11.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Dillard's has seen a 5-year revenue growth of 0.75%, while Kohl's's is 0.29%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Dillard's's ROE at 31.20% and Kohl's's ROE at 3.72%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $443.11 for Dillard's and $15.13 for Kohl's. Over the past year, Dillard's's prices ranged from $328.00 to $476.48, with a yearly change of 45.27%. Kohl's's prices fluctuated between $14.22 and $29.60, with a yearly change of 108.16%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.