Zumiez (NASDAQ: ZUMZ) and Destination XL Group (NASDAQ:DXLG) are both small-cap retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitabiliy, dividends and analyst recommendations.

Risk and Volatility

Zumiez has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500. Comparatively, Destination XL Group has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Zumiez and Destination XL Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zumiez 0 8 2 0 2.20
Destination XL Group 0 0 3 0 3.00

Zumiez currently has a consensus target price of $20.25, indicating a potential upside of 53.99%. Destination XL Group has a consensus target price of $4.75, indicating a potential upside of 131.71%. Given Destination XL Group’s stronger consensus rating and higher possible upside, analysts clearly believe Destination XL Group is more favorable than Zumiez.

Profitability

This table compares Zumiez and Destination XL Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zumiez 2.79% 7.98% 5.36%
Destination XL Group -1.90% -5.81% -1.83%

Institutional and Insider Ownership

85.3% of Zumiez shares are owned by institutional investors. Comparatively, 78.8% of Destination XL Group shares are owned by institutional investors. 27.5% of Zumiez shares are owned by company insiders. Comparatively, 31.5% of Destination XL Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Zumiez and Destination XL Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Zumiez $844.45 million 0.39 $66.70 million $0.96 13.70
Destination XL Group $450.02 million 0.22 $25.72 million ($0.17) -12.06

Zumiez has higher revenue and earnings than Destination XL Group. Destination XL Group is trading at a lower price-to-earnings ratio than Zumiez, indicating that it is currently the more affordable of the two stocks.

Summary

Zumiez beats Destination XL Group on 9 of the 13 factors compared between the two stocks.

About Zumiez

Zumiez Inc., including its subsidiaries, is a specialty retailer of apparel, footwear, accessories and hardgoods for young men and women through the fashion, music, art and culture of action sports, streetwear and other lifestyles. The Company operates under the names Zumiez, Blue Tomato and Fast Times. Additionally, it operates e-commerce Websites at www.zumiez.com, www.blue-tomato.com and www.fasttimes.com.au. It offers various categories of shoes, such as skate shoes, casual shoes, high tops, sandals, slip ons, runners, boots and shoe accessories, such as socks. It also offers flannels, baseball tees, hoodies, baseball hats, windbreakers, shirts, jackets, jerseys, sweaters and tanks, among others. For women, it offers t-shirts, tank tops, hoodies and sweatshirts, cardigans, jackets, skirts, jeans, joggers, leggings and dresses, among others. It provides various accessories, including watches, sunglasses, bracelets, earrings, rings, beanies, hats, belts, wallets and phone accessories

About Destination XL Group

Destination XL Group, Inc. is a specialty retailer of men’s apparel with retail and direct operations in the United States and London, England. The Company operates through the Big & Tall Men’s Apparel segment. The Company operates under the trade names of Destination XL, DXL, Casual Male XL, Casual Male XL outlets, DXL outlets, Rochester Clothing, ShoesXL and LivingXL. The Company operates approximately 170 Destination XL stores, 125 Casual Male XL retail stores, 40 Casual Male XL outlet stores, nine DXL outlet stores and five Rochester Clothing stores. Its direct business includes its DestinationXL.com and bigandtall.com e-commerce sites, which support its stores, brands and product extensions. Through its multiple brands, which include both branded apparel and private-label, the Company offers a range of merchandise. The Company carries various designer brands, including Cole Haan, Allen Edmonds, Timberland, Calvin Klein, Lacoste, Donald J. Pliner and Bruno Magli.

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