Macy's vs Target Which Is More Attractive?

Macy's and Target are two renowned names in the retail industry, both with a long history of success and a strong presence in the market. While Macy's is known for its upscale department stores and high-end fashion offerings, Target is a popular destination for affordable everyday essentials. Investors looking to diversify their portfolio may consider comparing the performance of Macy's and Target stocks to make informed decisions about where to allocate their funds.

Macy's or Target?

When comparing Macy's and Target, 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 Macy's and Target.

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. Macy's has a dividend yield of 4.21%, while Target has a dividend yield of 3.28%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Macy's reports a 5-year dividend growth of -15.21% year and a payout ratio of 102.19%. On the other hand, Target reports a 5-year dividend growth of 11.59% year and a payout ratio of 46.70%.

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 Macy's P/E ratio at 24.62 and Target's P/E ratio at 14.29. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Macy's P/B ratio is 0.26 while Target's P/B ratio is 4.31.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Macy's has seen a 5-year revenue growth of 0.04%, while Target's is 0.63%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Macy's's ROE at 2.45% and Target's ROE at 31.11%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $16.21 for Macy's and $135.25 for Target. Over the past year, Macy's's prices ranged from $14.06 to $22.10, with a yearly change of 57.18%. Target's prices fluctuated between $120.21 and $181.86, with a yearly change of 51.29%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.