Genesco (NYSE: GCO) and Stein Mart (NASDAQ:SMRT) are both small-cap retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitability, analyst recommendations, earnings, valuation and risk.

Analyst Ratings

This is a summary of recent ratings for Genesco and Stein Mart, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genesco 0 4 3 0 2.43
Stein Mart 0 3 0 0 2.00

Genesco currently has a consensus price target of $34.33, indicating a potential upside of 41.00%. Stein Mart has a consensus price target of $7.50, indicating a potential upside of 525.00%. Given Stein Mart’s higher probable upside, analysts clearly believe Stein Mart is more favorable than Genesco.

Valuation & Earnings

This table compares Genesco and Stein Mart’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Genesco $2.86 billion 0.17 $199.22 million $3.53 6.90
Stein Mart $1.33 billion 0.04 $2.13 million ($0.55) -2.18

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

Profitability

This table compares Genesco and Stein Mart’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Genesco 2.43% 7.36% 4.34%
Stein Mart -1.89% -34.59% -4.43%

Dividends

Stein Mart pays an annual dividend of $0.22 per share and has a dividend yield of 18.3%. Genesco does not pay a dividend. Stein Mart pays out -40.0% of its earnings in the form of a dividend.

Volatility & Risk

Genesco has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, Stein Mart has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500.

Insider and Institutional Ownership

95.9% of Genesco shares are held by institutional investors. Comparatively, 33.0% of Stein Mart shares are held by institutional investors. 3.3% of Genesco shares are held by company insiders. Comparatively, 34.7% of Stein Mart shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Genesco beats Stein Mart on 11 of the 15 factors compared between the two stocks.

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.

Stein Mart Company Profile

Stein Mart, Inc. is a national retailer offering the fashion merchandise, service and presentation of a department or specialty store. The Company offers apparel for women and men, as well as accessories, shoes and home fashions. The Company’s target customers are women over 45 years old. The Company operates approximately 280 stores in over 30 states and an Internet store. Its stores are located in the Northeast, Midwest, Southeast, Texas and the Southwest. It is concentrated in the Southeast and Texas where over 180 of its stores are located. The Company’s stores offer a range of services, such as merchandise locator service, a Preferred Customer program, co-branded and private label credit card programs, and electronic gift cards. The Company’s merchants purchase products from approximately 1,200 vendors. It leases all of its store locations, generally for approximately 10 years with options to extend the lease term for over two or five year periods.

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