Tilly’s (NYSE: TLYS) and L Brands (NYSE:LB) are both retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, earnings, profitabiliy, dividends, valuation and analyst recommendations.

Risk and Volatility

Tilly’s has a beta of -0.43, indicating that its share price is 143% less volatile than the S&P 500. Comparatively, L Brands has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Tilly’s and L Brands, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tilly’s 0 3 3 0 2.50
L Brands 3 16 9 0 2.21

Tilly’s currently has a consensus target price of $10.83, suggesting a potential upside of 6.00%. L Brands has a consensus target price of $55.68, suggesting a potential upside of 30.49%. Given L Brands’ higher possible upside, analysts plainly believe L Brands is more favorable than Tilly’s.

Dividends

L Brands pays an annual dividend of $2.40 per share and has a dividend yield of 5.6%. Tilly’s does not pay a dividend. L Brands pays out 63.2% of its earnings in the form of a dividend. Tilly’s has increased its dividend for 6 consecutive years.

Profitability

This table compares Tilly’s and L Brands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tilly’s 2.46% 7.86% 4.91%
L Brands 8.87% -104.19% 12.93%

Insider and Institutional Ownership

39.9% of Tilly’s shares are held by institutional investors. Comparatively, 75.4% of L Brands shares are held by institutional investors. 53.4% of Tilly’s shares are held by insiders. Comparatively, 16.5% of L Brands shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Tilly’s and L Brands’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tilly’s $569.68 million 0.52 $47.93 million $0.48 21.29
L Brands $12.40 billion 0.99 $2.43 billion $3.80 11.23

L Brands has higher revenue and earnings than Tilly’s. L Brands is trading at a lower price-to-earnings ratio than Tilly’s, indicating that it is currently the more affordable of the two stocks.

Summary

L Brands beats Tilly’s on 11 of the 17 factors compared between the two stocks.

About Tilly’s

Tilly’s, Inc. is a destination specialty retailer of casual apparel, footwear and accessories for young men, young women, boys and girls. The Company offers an unparalleled selection of relevant brands, styles, colors, sizes and price points. The Company’s apparel merchandise includes branded, fashion and styles for tops, outerwear, bottoms and dresses. Its accessories merchandise includes backpacks, hats, sunglasses, headphones, handbags, watches, jewelry and others. The Company offers its products through stores and Website. The Company operates over 220 stores in approximately 30 states. The Company’s stores are located in malls, lifestyle centers, power centers, community centers, outlet centers and street-front locations. The Company also operates an e-commerce platform for desktop and mobile. The Company’s third-party brands include AYC, Adidas, Billabong, Converse, Hurley, Nixon, JanSport, LRG and Stance, among others.

About L Brands

L Brands, Inc. operates specialty retail business. The Company is focused on women’s intimate and other apparel, personal care, beauty and home fragrance categories. Its segments include Victoria’s Secret, Bath & Body Works, and Victoria’s Secret and Bath & Body Works International. It sells its merchandise through company-owned specialty retail stores in the United States, Canada, the United Kingdom and Greater China, which are mall-based; through Websites, and through international franchise, license and wholesale partners. It operates in the retail brands, which include Victoria’s Secret, PINK, Bath & Body Works and La Senza. La Senza is a specialty retailer of women’s intimate apparel. It sells its La Senza products at over 120 La Senza stores in Canada. Henri Bendel sells handbags, jewelry and other accessory products through New York and 28 other stores. Mast Global is a merchandise sourcing and production function serving the Company and its international partners.

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