Head to Head Comparison: GAP (GAP) and Its Rivals

GAP (NYSE:GAP) is one of 15 publicly-traded companies in the “Family clothing stores” industry, but how does it contrast to its competitors? We will compare GAP to similar companies based on the strength of its dividends, valuation, earnings, risk, analyst recommendations, institutional ownership and profitability.

Profitability

This table compares GAP and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GAP	5.05%	28.89%	6.92%
GAP Competitors	3.12%	-376.16%	6.89%

Analyst Ratings

This is a breakdown of current recommendations for GAP and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAP	0	3	0	0	2.00
GAP Competitors	359	2141	2393	31	2.43

GAP presently has a consensus price target of $27.00, suggesting a potential upside of 23.85%. As a group, “Family clothing stores” companies have a potential upside of 12.45%. Given GAP’s higher probable upside, research analysts plainly believe GAP is more favorable than its competitors.

Insider & Institutional Ownership

58.8% of GAP shares are held by institutional investors. Comparatively, 71.6% of shares of all “Family clothing stores” companies are held by institutional investors. 31.0% of GAP shares are held by company insiders. Comparatively, 14.3% of shares of all “Family clothing stores” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

GAP has a beta of 2.35, indicating that its share price is 135% more volatile than the S&P 500. Comparatively, GAP’s competitors have a beta of 1.81, indicating that their average share price is 81% more volatile than the S&P 500.

Earnings & Valuation

This table compares GAP and its competitors top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
GAP	$14.89 billion	$502.00 million	10.79
GAP Competitors	$10.64 billion	$637.10 million	10.96

GAP has higher revenue, but lower earnings than its competitors. GAP is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Dividends

GAP pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. GAP pays out 29.7% of its earnings in the form of a dividend. As a group, “Family clothing stores” companies pay a dividend yield of 1.8% and pay out 37.8% of their earnings in the form of a dividend. GAP is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Summary

GAP beats its competitors on 9 of the 15 factors compared.

About GAP

The Gap, Inc. operates as an apparel retail company. The company offers apparel, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, and Athleta brands. Its products include adult apparel and accessories; and fitness and lifestyle products for use in yoga, training, sports, travel, and everyday activities for women and girls. The company offers its products through company-operated stores, franchise stores, websites, and third-party arrangements. It has franchise agreements to operate Old Navy, Gap, Banana Republic, and Athleta stores and websites in Asia, Europe, Latin America, the Middle East, and Africa. The Gap, Inc. was incorporated in 1969 and is headquartered in San Francisco, California.