Differential Brands Group (NASDAQ: DFBG) and Iconix Brand Group (NASDAQ:ICON) are both small-cap consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, institutional ownership, risk, earnings, analyst recommendations, dividends and profitabiliy.

Analyst Ratings

This is a breakdown of recent ratings for Differential Brands Group and Iconix Brand Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Differential Brands Group 0 0 1 0 3.00
Iconix Brand Group 0 1 2 0 2.67

Differential Brands Group currently has a consensus price target of $5.00, indicating a potential upside of 156.71%. Iconix Brand Group has a consensus price target of $10.75, indicating a potential upside of 61.17%. Given Differential Brands Group’s stronger consensus rating and higher probable upside, analysts plainly believe Differential Brands Group is more favorable than Iconix Brand Group.

Valuation and Earnings

This table compares Differential Brands Group and Iconix Brand Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Differential Brands Group $155.65 million 0.17 $3.42 million ($1.06) -1.84
Iconix Brand Group $359.51 million 1.06 $157.43 million ($4.89) -1.36

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

Insider and Institutional Ownership

1.5% of Differential Brands Group shares are held by institutional investors. Comparatively, 83.3% of Iconix Brand Group shares are held by institutional investors. 62.5% of Differential Brands Group shares are held by company insiders. Comparatively, 1.3% of Iconix Brand Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Differential Brands Group and Iconix Brand Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Differential Brands Group -8.79% -23.53% -6.57%
Iconix Brand Group -82.70% 9.27% 2.69%

Volatility & Risk

Differential Brands Group has a beta of -1.73, indicating that its share price is 273% less volatile than the S&P 500. Comparatively, Iconix Brand Group has a beta of 1.41, indicating that its share price is 41% more volatile than the S&P 500.

Summary

Iconix Brand Group beats Differential Brands Group on 8 of the 13 factors compared between the two stocks.

Differential Brands Group Company Profile

Differential Brands Group Inc., formerly Joe’s Jeans Inc., is engaged in the design, development and marketing of apparel products, which include denim jeans, related casual wear and accessories. The Company offers its products under various brands, such as Hudson, Robert Graham and SWIMS. Its segments are Wholesale and Retail. Its Wholesale segment consists of sales of Hudson products to retailers, specialty stores and international distributors. Its Retail segment consists of sales of its products to consumers through its retail Internet sites for Hudson products. The Hudson product line includes women’s, men’s and children’s denim jeans, pants and other bottoms. The Robert Graham product line includes men’s sport shirts, pants, sweaters, knits, t-shirts, sportcoats, outerwear and swimwear. Through SWIMS brand, it distributes a range of footwear, swimwear, outerwear, ready-to-wear and accessories across the world through department stores, independent specialty and luxury resorts.

Iconix Brand Group Company Profile

Iconix Brand Group, Inc. is a brand management company. As of December 31, 2016, the Company owned a portfolio of over 30 global consumer brands across women’s, men’s, and home categories. The Company operates through segments: men’s, women’s, home and international. The Company’s brand portfolio includes brands, such as Candie’s, Bongo, Joe Boxer, Rampage, Mudd, London Fog, Mossimo, Ocean Pacific/OP, Danskin/Danskin Now, Rocawear/Roc Nation, Cannon, Royal Velvet, Fieldcrest, Charisma, Starter, Waverly, Ecko Unltd/Mark Ecko Cut & Sew, Zoo York, Sharper Image, Umbro, Lee Cooper and Artful Dodger, and interests in Material Girl, Ed Hardy, Truth or Dare, Modern Amusement, Buffalo, Nick Graham Hydraulic and PONY brands. It operates in various geographic regions, including the United States, Japan and Other (which principally represent Latin America and Europe).

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