Last post I outlined three stocks I thought were interesting to look at because of the UK question - the problems in valuing a group as a whole when different parts within that group are performing so differently.  This post I'll try and highlight a few different metrics and ways of looking at things to try and draw distinctions between the companies. This is, of course, all complicated by the fact that the three - Dixons Retail (LON:DXNS) , Tesco (LON:TSCO) and Mothercare (LON:MTC) - sell quite different things, but then that's half the fun in investing!

Group level

On whole-group levels we see the valuations aren't too different on earnings terms for the three companies. All are on depressed last-year multiples (note the scale) and both Dixons and Tesco have forward earnings estimates which put them on a P/E of less than 10. Mothercare, I should note, is forecast to post a tiny profit next year and significant improvement thereafter. On tangible book terms, Dixons is the only one posting negative equity - largely because its recorded equity comprises mostly of goodwill instead of hard assets. Dixons do have considerably less to pay in obligated lease payments however, and their classification puts them on balance sheet, unlike Mothercare's and Tesco's considerable bills.  The type of stock also sees Dixons carrying a large amount of inventory (£960m) and therefore payables (£1.6bn) in group, which is something that one should always consider if forecasting a slowdown in the future.

International Shares

Of course, if we accept the postulate that it's good to be international and bad to be in the UK at the moment, we want to see a growing international revenue base and a shrinking UK one. The graphs above are all normalised to the same scale for easier comparison, and show that Dixons' strong Nordic business means it is the most benefited by international sales. In terms of growth, however, Mothercare is (by some distance) growing the fastest of the three, which is perhaps more important from my point of view. That Dixons has such a strong international contribution yet still posts losses is hardly a…

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