Ascena Retail Group (NASDAQ: ASNA) and Lands’ End (NASDAQ:LE) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitabiliy, earnings, institutional ownership and dividends.

Volatility and Risk

Ascena Retail Group has a beta of 1.89, suggesting that its share price is 89% more volatile than the S&P 500. Comparatively, Lands’ End has a beta of 0.31, suggesting that its share price is 69% less volatile than the S&P 500.

Insider & Institutional Ownership

97.2% of Ascena Retail Group shares are owned by institutional investors. Comparatively, 62.7% of Lands’ End shares are owned by institutional investors. 8.6% of Ascena Retail Group shares are owned by insiders. Comparatively, 0.5% of Lands’ End shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Ascena Retail Group and Lands’ End, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ascena Retail Group 1 7 0 0 1.88
Lands’ End 0 2 0 0 2.00

Ascena Retail Group currently has a consensus price target of $4.50, indicating a potential upside of 126.13%. Lands’ End has a consensus price target of $15.00, indicating a potential upside of 4.17%. Given Ascena Retail Group’s higher probable upside, research analysts clearly believe Ascena Retail Group is more favorable than Lands’ End.

Profitability

This table compares Ascena Retail Group and Lands’ End’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ascena Retail Group -15.25% 2.96% 0.94%
Lands’ End -8.41% -0.07% -0.02%

Earnings & Valuation

This table compares Ascena Retail Group and Lands’ End’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ascena Retail Group $6.80 billion 0.06 $581.10 million ($5.33) -0.37
Lands’ End $1.33 billion 0.35 $39.91 million ($3.49) -4.13

Ascena Retail Group has higher revenue and earnings than Lands’ End. Lands’ End is trading at a lower price-to-earnings ratio than Ascena Retail Group, indicating that it is currently the more affordable of the two stocks.

Summary

Ascena Retail Group beats Lands’ End on 8 of the 12 factors compared between the two stocks.

About Ascena Retail Group

Ascena Retail Group, Inc. is a specialty retailer of apparel for women and tween girls. The Company operates through six segments: ANN, Justice, Lane Bryant, maurices, dressbarn and Catherines. The ANN segment offers feminine classics and fashion choices, sold primarily under the Ann Taylor and LOFT brands. The Justice segment offers apparel to girls who are aged 6 to 12. The Lane Bryant segment offers apparel to female customers in plus-sizes 14-28. The maurices segment offers women’s casual clothing, career wear, dressy apparel, active wear and accessories. The dressbarn segment consists of the specialty retail, outlet and e-commerce operations of the dressbarn brand. The Catherines segment offers classic apparel and accessories to female customers for wear-to-work and casual lifestyles. As of July 30, 2016, the Company operated approximately 4,900 stores in 49 United States’ states, the District of Columbia, Canada and Puerto Rico.

About Lands’ End

Lands’ End, Inc. (Lands’ End) is a multi-channel retailer of casual clothing, accessories and footwear, as well as home products. The Company operates through two segments: Direct and Retail. The Company offers products through catalogs, online at www.landsend.com. The Direct segment sells products through the Company’s e-commerce Websites, international Websites and direct mail catalogs. The Retail segment sells products and services through Lands’ End Shops at Sears across the United States, the Company’s standalone Lands’ End Inlet stores and international shop-in-shops. The Company’s product categories include Apparel and Non-apparel. The Non-apparel category offers accessories, footwear and home goods. The Company provides embroidery, monogramming, gift wrapping, shipping and other services. In addition, the Company offers sheets and pillowcases, duvet covers and comforters, blankets and throws, mattress pads, towels, rugs and mats, school uniforms and shower curtains.

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