Financial Analysis: Bath & Body Works (NYSE:BBWI) and JD.com (NASDAQ:JD)

Bath & Body Works (NYSE:BBWI) and JD.com (NASDAQ:JD) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, dividends, risk, valuation, profitability, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

95.1% of Bath & Body Works shares are held by institutional investors. Comparatively, 16.0% of JD.com shares are held by institutional investors. 0.3% of Bath & Body Works shares are held by insiders. Comparatively, 16.6% of JD.com shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Bath & Body Works and JD.com’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bath & Body Works	12.43%	-44.03%	14.45%
JD.com	3.12%	14.53%	6.71%

Dividends

Bath & Body Works pays an annual dividend of $0.80 per share and has a dividend yield of 2.6%. JD.com pays an annual dividend of $0.98 per share and has a dividend yield of 2.4%. Bath & Body Works pays out 22.0% of its earnings in the form of a dividend. JD.com pays out 26.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Bath & Body Works is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and target prices for Bath & Body Works and JD.com, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bath & Body Works	0	5	13	0	2.72
JD.com	0	2	11	1	2.93

Bath & Body Works presently has a consensus target price of $45.06, indicating a potential upside of 47.28%. JD.com has a consensus target price of $45.64, indicating a potential upside of 10.46%. Given Bath & Body Works’ higher probable upside, research analysts clearly believe Bath & Body Works is more favorable than JD.com.

Risk and Volatility

Bath & Body Works has a beta of 1.89, meaning that its stock price is 89% more volatile than the S&P 500. Comparatively, JD.com has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500.

Earnings & Valuation

This table compares Bath & Body Works and JD.com”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bath & Body Works	$7.31 billion	0.90	$878.00 million	$3.64	8.41
JD.com	$1,158.82 billion	0.06	$3.40 billion	$3.75	11.02

JD.com has higher revenue and earnings than Bath & Body Works. Bath & Body Works is trading at a lower price-to-earnings ratio than JD.com, indicating that it is currently the more affordable of the two stocks.

Summary

Bath & Body Works beats JD.com on 9 of the 17 factors compared between the two stocks.

About Bath & Body Works

Bath & Body Works, Inc. is a specialty retailers and home to America’s Favorite Fragrances, offering a breadth of exclusive fragrances for the body and home, including the selling collections for fine fragrance mist, body lotion and body cream, 3-wick candles, home fragrance diffusers and liquid hand soap. The company was founded by Leslie Herbert Wexner in 1963 and is headquartered in Columbus, OH.

About JD.com

JD.com, Inc. operates as a supply chain-based technology and service provider in the People's Republic of China. The company offers computers, communication, and consumer electronics products, as well as home appliances; and general merchandise products comprising food, beverage and fresh produce, baby and maternity products, furniture and household goods, cosmetics and other personal care items, pharmaceutical and healthcare products, industrial products, books, automobile accessories, apparel and footwear, bags, and jewelry. It also provides online marketplace services for third-party merchants; marketing services; and omni-channel solutions to customers and offline retailers, as well as online healthcare services. In addition, the company develops, owns, and manages its logistics facilities and other real estate properties to support third parties; offers asset management services and integrated service platform; leasing of storage facilities and related management services; and engages in online retail business. Further, it provides integrated data, technology, business, and user management industry solutions to support the digitization of enterprises and institutions; and technology-driven supply chain solutions and logistics services. The company was formerly known as 360buy Jingdong Inc. and changed its name to JD.com, Inc. in January 2014. JD.com, Inc. was incorporated in 2006 and is headquartered in Beijing, the People's Republic of China.