Your DVD player just gave out on you. Where do you turn to find a replacement? Best Buy
Yes, both companies will announce their quarterly financials this week, but the similarities probably end there. While they may have been on nearly equal footing a few years ago, Best Buy has thrived while Circuit City has struggled.
While we will soon know how each company fared on the way to the bottom line, we already know that Best Buy, once again, thumped Circuit City in same-store sales for the period. Best Buy's comps rose by 8.3% while Circuit City mustered a 6.4% uptick.
Motley Fool Stock Advisor recommendation Best Buy has padded its market share lead over Circuit City, but the difference in valuation has widened even further. So, in that sense, bargain hunters might be encouraged by Circuit City's improvement -- even though it was going to be a layup anyway coming after last year's 10% slide in same-store sales.
I mean these are companies, in many cases, selling the same stuff at similar prices, so the gross margins aren't that different. Circuit City blows it from there, but is Best Buy really worth a price-to-sales multiple that is three times higher or a price-to-book multiple that is nearly five times higher?
I love Best Buy, and I recognize that Circuit City has its risks. However, if I had to invest in the stock with more in untapped potential, I would be hard-pressed not to turn to Circuit City.
But don't let the consumer electronics retailers keep you from enjoying the other notable companies due up for earnings reports this week. Oracle
So we don't have to ask ourselves if Circuit City is the better buy or even the Best Buy. The market is always ripe with alternatives.
Find yourself drooling at the living room setups at your local Best Buy or Circuit City? Want to know how you can get hooked up with the latest gadgetry? All this and more in the Help With This Home Theater discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz had a different idea of home theater. It's called watching his two sons argue. He does not own shares in any of the companies mentioned in this story.