Financial Contrast: GAP (GAP) and The Competition

GAP (NYSE:GAP) is one of 14 public companies in the “Family clothing stores” industry, but how does it compare to its peers? We will compare GAP to similar companies based on the strength of its institutional ownership, valuation, profitability, analyst recommendations, risk, dividends and earnings.

Insider and Institutional Ownership

58.8% of GAP shares are held by institutional investors. Comparatively, 75.3% of shares of all “Family clothing stores” companies are held by institutional investors. 31.0% of GAP shares are held by insiders. Comparatively, 15.8% of shares of all “Family clothing stores” companies are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

GAP has a beta of 2.35, meaning that its stock price is 135% more volatile than the S&P 500. Comparatively, GAP’s peers have a beta of 1.72, meaning that their average stock price is 72% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for GAP and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAP	0	3	0	0	2.00
GAP Competitors	348	2121	2378	31	2.43

GAP currently has a consensus price target of $27.00, indicating a potential upside of 23.91%. As a group, “Family clothing stores” companies have a potential upside of 10.37%. Given GAP’s higher probable upside, analysts plainly believe GAP is more favorable than its peers.

Profitability

This table compares GAP and its peers’ 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	4.24%	-410.26%	7.55%

Dividends

GAP pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. GAP pays out -2.2% 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 -56.4% of their earnings in the form of a dividend.

Earnings & Valuation

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

	Gross Revenue	Net Income	Price/Earnings Ratio
GAP	$15.17 billion	$502.00 million	-0.80
GAP Competitors	$11.36 billion	$706.90 million	11.72

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

Summary

GAP peers beat GAP on 8 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.