Comparing GAP (GAP) and Its Competitors

GAP (NYSE:GAP) is one of 13 publicly-traded companies in the “Family clothing stores” industry, but how does it weigh in compared to its rivals? We will compare GAP to similar companies based on the strength of its valuation, profitability, institutional ownership, risk, dividends, analyst recommendations and earnings.

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 rivals have a beta of 2.20, indicating that their average share price is 120% more volatile than the S&P 500.

Valuation and Earnings

This table compares GAP and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
GAP	$15.17 billion	$502.00 million	-0.80
GAP Competitors	$12.45 billion	$774.80 million	12.10

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

Insider and Institutional Ownership

58.8% of GAP shares are owned by institutional investors. Comparatively, 75.6% of shares of all “Family clothing stores” companies are owned by institutional investors. 31.0% of GAP shares are owned by insiders. Comparatively, 16.2% of shares of all “Family clothing stores” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for GAP and its rivals, 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	346	2105	2336	30	2.43

GAP presently has a consensus target price of $27.00, indicating a potential upside of 24.25%. As a group, “Family clothing stores” companies have a potential upside of 10.87%. Given GAP’s higher probable upside, equities research analysts clearly believe GAP is more favorable than its rivals.

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 1.4% and pay out -191.3% of their earnings in the form of a dividend.

Profitability

This table compares GAP and its rivals’ 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	4.36%	-452.40%	7.85%

Summary

GAP rivals beat GAP on 8 of the 15 factors compared.

GAP Company Profile

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.