Give me your thrifty and your penny-pinching huddled masses and I'll show you vast parking lots that fill into huge storefronts where the prices are as low as the cash register lines are long. It's a sight to see, but not every discount department store chain is the same. Wal-Mart (NYSE:WMT) has grown to become the world's largest retailer. Target (NYSE:TGT) has become the smaller, hipper alternative.

But the path to retailing success is lined with the memories of fallen giants like Ames, Montgomery Ward, and Service Merchandise. Kmart has emerged from bankruptcy, but it's still too early too tell if the walking wounded will fully recover.

Yet despite the sector's sad sacks, Wal-Mart and Target have proven to be dependable all-weather producers. But which one stands to be the better investment? Let's take stock of the stocks.

How big is the world's love of Wal-Mart? Let me count the bays. With a stateside presence that includes 1,536 Wal-Mart stores, 1,309 Supercenters, 526 SAM'S CLUBS, and its emphasis on overseas expansion that is more than 1,000 stores strong, there's no other way to say it: Wal-Mart is huge. Wal-Mart is everywhere.

Last year, the company produced $8 billion in profits on a whopping $244.5 billion in sales. Divide one into the other and if the 3.3% in net margins doesn't inspire you, let's get you up to speed with the ways of discounted retail.

Discount department stores aren't fat margin ventures. Gross margins are low by definition and the company's ability to turn its inventory over quickly and keep costs low dictates its success on the bottom line. In short, retailers really do make it up in volume.

Wal-Mart has evolved from its original five-and-dime format. From services to groceries, it has become a one-stop titan for the bargain hungry public. Its Supercenters stock as many as 150,000 different items. SAM'S CLUBS offer even larger savings on bulk purchases, which have also fueled the success of its warehouse club rivals Costco (NASDAQ:COST) and BJ's Warehouse Club (NYSE:BJ).

Yes, Wal-Mart is often an easy target (no pun intended) because of its size. But are the knocks on the company's low wages and its ability to drive local operations out of business fair, or will sour grapes become the 150,001st item to stock at your local Supercenter? Our Foolish Community debated those issues last month. Where do you stand? Before you decide, let's take a look at the company's warmer side.

Wal-Mart is actually a charitable behemoth, having donated more than $100 million to 75,000 different organizations last year and lending a hand in raising another $100 million in local fund-raising efforts and merchandise donations. What's more, earlier this year Fortune magazine named Wal-Mart America's Most-Admired Company.

So, let's tackle the financials behind the world's largest corporation. Like clockwork, every year has brought new records in sales and earnings. Yes, Wal-Mart is a massive enterprise, but it's still managed to grow its profits by an annualized rate of 13.5% over the past five years. Efficiency hasn't been as neat, as last year's healthy showing still fell short of the return on assets and return on equity peaks established three years ago. Still, if you think that Wal-Mart has exhausted its prime expansion opportunities, grab a passport.

With so much real estate left to conquer overseas, it should come as no surprise that the company's fastest growth is taking place there. Last year, just $41 billion of the company's sales came from outside the country. I realize that the words "just" and "$41 billion" look like odd sentence buddies, but at only $2 billion of the company's operating profits last year, as big as Wal-Mart has become -- it can still go bigger.

Cashing in on cheap chic, Target has taken many of the artsy wrinkles of the full-priced department stores and ironed them out for those on a tighter budget. The company hasn't hesitated in partnering with the likes of famed architect Michael Graves or the fashion visionaries at Mossimo (NASDAQ:MOSS) to stay on the leading edge of merchandising. Sure, Kmart meant well when it aimed high with classy celebrities like Jaclyn Smith and Martha Stewart, but Target has walked the talk by making sure that the entire store remains vibrant and fresh.

The company's collection of stores is substantially smaller than Wal-Mart's. Target runs 1,167 namesake units as well as 265 Mervyn's and 62 Marshall Field's locations. It closed out fiscal 2003 producing earnings of $1.6 billion on nearly $44 billion in sales.

Target's "target" market is a cut above the typical demographics of a discount department store chain. The median age of a Target shopper is 44 with a household income of $54,000 a year. Four out of every five patrons is female and a little more than half have completed college.

Despite being nimble, it hasn't necessarily grown any faster than Wal-Mart. Over the last five years, it has grown its bottom line at an annualized clip of just 13.3%. However, the future is heartier as Wall Street sees the company growing earnings by 15% a year vs. a 14% annual rate for Wal-Mart.

Same-store sales have been sandbagged by the poor performance of its non-Target concepts, but even its flagship brand struggled with its comps last year and didn't bounce back until this past month.

However, like Wal-Mart, Target has been able to grow its top and bottom lines every year. That's no simple feat in a world where corporate earnings often zig and zag along with the economy.

Put it all together
One sum worth remembering is $1.81. It may not get you as much as you bargained for at a discount department store, but it's the amount in diluted earnings per share that both Wal-Mart and Target reported this past year. Knowing that, the discounting mentality might draw you to shares of Target as they currently trade for about $20 less than Wal-Mart. However, that analysis is incomplete without factoring in many of the reasons for Wal-Mart's valuation premium.

Wal-Mart sports the cleaner balance sheet. It also has a proven global track record as its international take alone last year was pretty close to Target's results as a whole. Wal-Mart also has the marquee brand.

Yet Target is not without its merits. It produced higher net margins last year than Wal-Mart and the stock is selling at half of the price-to-book ratio of Wal-Mart. So, the ultimate decision, if you were to ever arrive at that theoretical juncture, is what type of chip are you looking for? True blue or dirt cheap? Maybe it's time to stock up for summer.

Rick Munarriz actually has to drive past two Targets to get to his nearest Wal-Mart. Really. However, he has never owned shares in either company. Rick's stock holdings can be viewed online, as can the Fool's disclosure policy.