Reviewing Gap, Inc. (The) (GPS) & Genesco (GCO)
Gap, Inc. (The) (NYSE: GPS) and Genesco (NYSE:GCO) are both retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, profitability, valuation and earnings.
Insider and Institutional Ownership
57.3% of Gap, Inc. (The) shares are owned by institutional investors. 27.3% of Gap, Inc. (The) shares are owned by insiders. Comparatively, 3.3% of Genesco shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
This is a breakdown of recent recommendations and price targets for Gap, Inc. (The) and Genesco, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Gap, Inc. (The)||3||17||6||0||2.12|
Gap, Inc. (The) presently has a consensus price target of $25.76, suggesting a potential upside of 14.14%. Genesco has a consensus price target of $45.17, suggesting a potential upside of 68.85%. Given Genesco’s stronger consensus rating and higher probable upside, analysts clearly believe Genesco is more favorable than Gap, Inc. (The).
Gap, Inc. (The) pays an annual dividend of $0.92 per share and has a dividend yield of 4.1%. Genesco does not pay a dividend. Gap, Inc. (The) pays out 53.2% of its earnings in the form of a dividend. Genesco has raised its dividend for 7 consecutive years.
Volatility & Risk
Gap, Inc. (The) has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, Genesco has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500.
Valuation and Earnings
This table compares Gap, Inc. (The) and Genesco’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Gap, Inc. (The)||$15.52 billion||0.58||$2.05 billion||$1.73||13.05|
|Genesco||$2.86 billion||0.18||$199.22 million||$4.46||6.00|
Gap, Inc. (The) has higher revenue and earnings than Genesco. Genesco is trading at a lower price-to-earnings ratio than Gap, Inc. (The), indicating that it is currently the more affordable of the two stocks.
This table compares Gap, Inc. (The) and Genesco’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Gap, Inc. (The)||4.46%||29.75%||10.69%|
Gap, Inc. (The) beats Genesco on 11 of the 17 factors compared between the two stocks.
Gap, Inc. (The) Company Profile
The Gap, Inc. (Gap Inc.) is an apparel retail company. The Company offers apparel, accessories and personal care products for men, women and children under the Gap, Banana Republic, Old Navy, Athleta and Intermix brands. Its products are available to customers online through Company-owned Websites and through the use of third-parties that provide logistics and fulfillment services. In addition to operating in the specialty, outlet, online and franchise channels, it also uses the Company’s omni-channel capabilities to bridge the digital world and physical stores. Its omni-channel services, including order-in-store, reserve-in-store, find-in-store and ship-from-store are tailored across its portfolio of brands. It also sells products that are designed and manufactured by branded third-parties, especially at its Intermix brands. It has Company-operated stores in the United States, Canada, the United Kingdom, France, Ireland, Japan, Italy, China, Hong Kong, Taiwan, and Mexico.
Genesco Company Profile
Genesco Inc. is a retailer and wholesaler of footwear, apparel and accessories. The Company operates in five segments: Journeys Group, Schuh Group, Lids Sports Group, Johnston & Murphy Group and Licensed Brands. It relies on independent third-party manufacturers for production of its footwear products sold at wholesale. It sources footwear and accessory products from foreign manufacturers located in Bangladesh, Brazil, Cambodia, Canada, China, Dominican Republic, El Salvador, France, Germany, Hong Kong, India, Indonesia, Italy, Mexico, the Netherlands, Portugal, Peru, Romania, Taiwan and Vietnam. As of January 28, 2017, it operated 2,794 retail footwear, headwear and sports apparel and accessory stores and leased departments located primarily throughout the United States and in Puerto Rico, including 147 headwear and sports apparel and accessory stores and 87 footwear stores in Canada and 128 footwear stores in the United Kingdom, the Republic of Ireland and Germany.
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