DDS vs M: Which Is the Better Buy in 2026?
Last updated November 2026
Short answer
DDS is the larger of the two ($10.12B market cap): the incumbent the market prices for continued execution (18.77x forward earnings, beta 1.07). M is the smaller challenger ($6.38B), cheaper on forward earnings (10.29x): more room to run, but more to prove. The real question is which set of drivers you believe, and whether owning one (or both) leaves you over-concentrated.
DDS vs M: the tie-breaker metrics
Same yardstick, side by side (as of November 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.
| Metric | DDS | M | What it tells you |
|---|---|---|---|
| Market cap | $10.12B | $6.38B | Size. The larger name is the incumbent; the smaller has more room to grow and more to prove. |
| Forward P/E | 18.77 | 10.29 | Valuation on next year's expected earnings, the same yardstick for both. Lower is cheaper for that growth; higher means the market is paying up. |
| Trailing P/E | 14.84 | 8.94 | Valuation on the last 12 months. A big drop from trailing to forward means the market expects earnings to jump, so more growth is already in the price. |
| Beta | 1.07 | 1.43 | Volatility vs the market. Above 1 swings harder than the index; below 1 is steadier. Higher beta means bigger drawdowns to hold through. |
| Price vs 52-week range | 61% of range | 78% of range | Where today's price sits between the 52-week low and high. Near the high is momentum with less margin of safety; near the low is out of favor or a discount, depending on why. |
| Price / book | 4.77 | 1.29 | How much you pay over book value. Very high can signal an asset-light, high-return business or a rich price. |
Reading it: M is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.
Before you buy: how DDS and M affect your concentration
The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. DDS and M share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.
This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined DDS and M exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.
What does Dillard's (DDS) do?
Dillard's sells apparel, cosmetics, footwear and home goods through about 272 stores (roughly 28 of them clearance centers) in about 30 states, concentrated in Texas, Florida and the rest of the Sun Belt, plus dillards.com. Total selling space is around ~46 million square feet, and unlike most mall-anchor peers Dillard's owns the large majority of that space outright rather than leasing it. A second, unglamorous segment is CDI Contractors, a general contracting business that builds and remodels Dillard's own stores and takes third-party commercial work. Fiscal 2025, the 52 weeks ended January 31, 2026, produced net sales of about ~$6.47 billion and net income of about ~$570 million, or roughly ~$36.42 per share.
What does Macy's (M) do?
Macy's, Inc. is a US retail company built around three banners: Macy's, the mid-tier department store that carries the company's name; Bloomingdale's, a higher-end luxury chain; and Bluemercury, a specialty beauty and cosmetics retailer. It sells apparel, accessories, cosmetics, home goods, and other merchandise through hundreds of stores and its e-commerce sites. Beyond retail, Macy's owns a substantial real-estate portfolio, and the value of that property has long been part of the investment debate around the stock.
DDS vs M: how do they differ?
Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.
- DDS drivers: The shrinking share count; Merchandise margin and inventory discipline.
- M drivers: Reimagined stores and the turnaround plan; Bloomingdale's and Bluemercury as growth banners.
Which fits which kind of investor
A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. A useful test is which set of risks you could hold through a drawdown: Department stores are in secular decline, and Dillard's is not adding stores, so any growth has to come from comparable sales and margin rather than square footage. For M, the central risk is structural: department stores have lost share for years to online sellers, off-price chains, and direct-to-consumer brands, and a turnaround does not reverse that secular pressure.
DDS or M: which should you pick?
Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick DDS if you believe its drivers more; M if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the DDS and M guides.
DDS vs M: the full fundamentals
DDS. The trailing multiple near ~15x is normal for a department store, but trailing earnings include the interchange settlement gain, so the forward multiple sits closer to ~19.5x on analysts' estimate of ~$34.50 for the fiscal year ending January 2028. The shares trade above the ~$546 average target after a ~22% three-month rally. The next report, covering the quarter ending around October 31, is expected around November 12, 2026, with consensus EPS near ~$8.05.
M. Macy's trades at about 9x trailing earnings and 0.3x sales, a low multiple typical of legacy retail that reflects genuine doubts about long-term growth even after a roughly 36 percent gain over the past year. Earnings have beaten estimates four quarters running, but consensus still expects roughly flat revenue for fiscal 2026 and a seasonal loss in the third quarter, so the re-rating depends on the reimagined model working at scale. Treat any single quarter's comp as a data point, not a trend.
Headline figures (approximate, October 2026): DDS shows revenue (ttm) ~$6.6B, roughly flat (Q2 FY2026 ~-0.4% yoy), q2 fy2026 (quarter ended aug 1, 2026) Sales ~$1.53B; EPS ~$6.26 vs ~$4.21 expected, net income (ttm) ~$682M, diluted eps (ttm) ~$43.64; M shows revenue (fiscal 2025, ended jan 2026) ~$21.8 billion; analysts expect ~$21.9 billion for fiscal 2026, latest quarter (q2 fiscal 2026) Revenue ~$4.87 billion; EPS $0.40 vs ~$0.37 estimate, net income (fiscal 2025) ~$642 million, margins (ttm) ~40 percent gross, ~3 percent operating and net.
The bottom line: DDS vs M
DDS and M are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined DDS and M exposure against your real portfolio. It is not an investment adviser.
Wondering how DDS or M fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in Dillard's with AI
Connect the broker you already use and ask Walnut's AI how DDS fits what you actually hold: whether you own it already through a fund, what it would do to your concentration, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
What is the difference between DDS and M?
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Dillard's sells apparel, cosmetics, footwear and home goods through about 272 stores (roughly 28 of them clearance centers) in about 30 states, concentrated in Texas, Florida and the rest of the Sun Belt, plus dillards.com. Macy's, Inc. They show up together because they share investment themes, but they are different businesses, so the better fit depends on which thesis you are expressing.
Is DDS or M the better stock?
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Neither is universally better. DDS is the larger incumbent; M is the smaller challenger and looks cheaper on forward earnings. Walnut is informational, not investment advice. Compare what each does, the tie-breaker metrics above, and the risks, then decide which fits your thesis and what you already own.
Which is cheaper, DDS or M?
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On forward P/E (as of November 2026), DDS trades at 18.77x and M at 10.29x, so M is the cheaper of the two on next year's expected earnings. A lower multiple is not automatically the better buy: a richer valuation can be justified by faster growth, and a lower one can reflect real risk. Weigh the multiple against how fast each business is compounding.
Should you own both DDS and M?
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Because they share themes, owning both concentrates you in that theme. That can be intentional (a focused bet) or accidental (less diversification than it looks). Walnut can show your combined exposure across both, and whether adding either over-concentrates you, before you buy.
What are the risks of DDS vs M?
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DDS: Department stores are in secular decline, and Dillard's is not adding stores, so any growth has to come from comparable sales and margin rather than square footage. Sun Belt concentration ties results tightly to Texas and Florida consumer spending and to mall traffic in those markets. Q1 fiscal 2026 earnings were flattered by the ~$104.1 million pre-tax interchange settlement gain, which will not repeat, so year-over-year comparisons in fiscal 2027 face a hole. Apparel tariffs and import costs pressure the merchandise margin that carries the whole model. Governance and liquidity are both concentrated: the Dillard family elects the board majority through Class B stock, only about 3 analysts publish estimates with an average target near ~$546 (below the ~$671 share price) and an underperform consensus, and the small float has historically drawn heavy short interest that amplifies moves in both directions. Analysts expect EPS to slip to about ~$34.50 in the fiscal year ending January 2028, which is why the forward P/E (~19.5x) sits above the trailing one. The October 2026 move of the primary listing to the new Texas Stock Exchange is untested territory for trading liquidity, though the ticker is unchanged. M: The central risk is structural: department stores have lost share for years to online sellers, off-price chains, and direct-to-consumer brands, and a turnaround does not reverse that secular pressure. Macy's remains exposed to discretionary consumer spending, so a weaker economy or a cautious shopper can quickly pressure comparable sales and margins, and its operating margin is thin at about 3 percent. Store closures shrink the footprint even as they improve quality, meaning total sales can decline while the reimagined base grows; analysts on average expect fiscal 2026 revenue of about $21.9 billion, roughly flat. The balance sheet carries about $5.1 billion of debt against about $1.3 billion of cash. The plan spans multiple years and depends heavily on management execution, and any stumble in the reimagined-store rollout would undercut the thesis. Tariffs and higher input costs add margin uncertainty, the stock has already risen about 36 percent in a year and trades above the average analyst target of about $23, and the real-estate value, while real, is not easily or quickly converted into cash for shareholders.
Walnut is informational, not investment advice. This page is descriptive and not a recommendation to buy or sell DDS or M; figures are approximate and dated (as of November 2026). Verify current data before investing.