Marshalls vs Ross Stores

Marshalls and Ross Stores are two popular discount retailers that offer a wide range of products at affordable prices. Both companies have gained a strong foothold in the retail industry, with Marshalls being owned by TJX Companies and Ross Stores being a standalone entity. Investors are constantly comparing the two stocks to determine which offers the better investment opportunity. Marshalls has a strong presence in the market, but Ross Stores has shown consistent growth and profitability. This analysis will delve into the financial performance and potential future outlook of both Marshalls and Ross Stores stocks.

Marshalls or Ross Stores?

When comparing Marshalls and Ross Stores, 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 Marshalls and Ross Stores.

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. Marshalls has a dividend yield of 2.69%, while Ross Stores has a dividend yield of 1.23%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Marshalls reports a 5-year dividend growth of 9.34% year and a payout ratio of 146.30%. On the other hand, Ross Stores reports a 5-year dividend growth of 8.29% year and a payout ratio of 22.77%.

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 Marshalls P/E ratio at 36.56 and Ross Stores's P/E ratio at 23.25. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Marshalls P/B ratio is 1.19 while Ross Stores's P/B ratio is 9.39.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Marshalls has seen a 5-year revenue growth of 0.07%, while Ross Stores's is 0.50%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Marshalls's ROE at 3.32% and Ross Stores's ROE at 42.43%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are £308.50 for Marshalls and $144.25 for Ross Stores. Over the past year, Marshalls's prices ranged from £195.30 to £364.50, with a yearly change of 86.64%. Ross Stores's prices fluctuated between $112.39 and $163.60, with a yearly change of 45.56%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.