Foot Locker (NYSE: FL) and Genesco (NYSE:GCO) are both retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, risk, institutional ownership and dividends.

Institutional and Insider Ownership

93.5% of Foot Locker shares are held by institutional investors. 2.9% of Foot Locker shares are held by company insiders. Comparatively, 3.3% of Genesco shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Foot Locker and Genesco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Foot Locker 8.39% 23.87% 16.90%
Genesco 3.07% 8.41% 4.94%

Analyst Ratings

This is a summary of recent ratings and price targets for Foot Locker and Genesco, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Foot Locker 1 11 12 0 2.46
Genesco 0 3 4 0 2.57

Foot Locker currently has a consensus target price of $67.36, indicating a potential upside of 95.92%. Genesco has a consensus target price of $45.17, indicating a potential upside of 88.98%. Given Foot Locker’s higher probable upside, equities research analysts plainly believe Foot Locker is more favorable than Genesco.

Earnings and Valuation

This table compares Foot Locker and Genesco’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Foot Locker $7.78 billion 0.58 $1.13 billion $4.34 7.92
Genesco $2.86 billion 0.16 $199.22 million $4.46 5.36

Foot Locker has higher revenue and earnings than Genesco. Genesco is trading at a lower price-to-earnings ratio than Foot Locker, indicating that it is currently the more affordable of the two stocks.

Dividends

Foot Locker pays an annual dividend of $1.24 per share and has a dividend yield of 3.6%. Genesco does not pay a dividend. Foot Locker pays out 28.6% of its earnings in the form of a dividend. Foot Locker has raised its dividend for 6 consecutive years.

Volatility & Risk

Foot Locker has a beta of 0.68, indicating that its share price is 32% 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.

Summary

Foot Locker beats Genesco on 12 of the 17 factors compared between the two stocks.

About Foot Locker

Foot Locker, Inc. is a retailer of shoes and apparel. The Company operates through two segments: Athletic Stores and Direct-to-Customers. The Company is an athletic footwear and apparel retailer, which include businesses, such as include Foot Locker, Kids Foot Locker, Lady Foot Locker, Champs Sports, Footaction, Runners Point, Sidestep and SIX:02. The Direct-to-Customers segment is multi-branded and sells directly to customers through Internet and mobile sites and catalogs. The Direct-to-Customers segment operates the Websites for eastbay.com, final-score.com, eastbayteamsales.com and sp24.com. Additionally, this segment includes the Websites, both desktop and mobile, aligned with the brand names of its store banners (footlocker.com, ladyfootlocker.com, six02.com kidsfootlocker.com, champssports.com, footaction.com, footlocker.ca, footlocker.eu, runnerspoint.com and sidestep-shoes.com).

About Genesco

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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