Francesca’s Holdings Corporation (NASDAQ: FRAN) and Foot Locker (NYSE:FL) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, valuation, risk and profitability.

Dividends

Foot Locker pays an annual dividend of $1.24 per share and has a dividend yield of 3.6%. Francesca’s Holdings Corporation 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.

Valuation and Earnings

This table compares Francesca’s Holdings Corporation and Foot Locker’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Francesca’s Holdings Corporation $493.21 million 0.55 $78.79 million $0.97 7.66
Foot Locker $7.70 billion 0.55 $1.06 billion $4.34 7.92

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Francesca’s Holdings Corporation and Foot Locker, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Francesca’s Holdings Corporation 0 6 2 0 2.25
Foot Locker 1 12 11 0 2.42

Francesca’s Holdings Corporation currently has a consensus target price of $13.86, indicating a potential upside of 86.50%. Foot Locker has a consensus target price of $63.27, indicating a potential upside of 84.02%. Given Francesca’s Holdings Corporation’s higher probable upside, equities analysts clearly believe Francesca’s Holdings Corporation is more favorable than Foot Locker.

Institutional & Insider Ownership

96.8% of Foot Locker shares are owned by institutional investors. 1.2% of Francesca’s Holdings Corporation shares are owned by insiders. Comparatively, 1.7% of Foot Locker 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.

Profitability

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

Net Margins Return on Equity Return on Assets
Francesca’s Holdings Corporation 7.28% 31.88% 18.83%
Foot Locker 7.49% 21.52% 15.50%

Risk and Volatility

Francesca’s Holdings Corporation has a beta of 0.22, suggesting that its share price is 78% less volatile than the S&P 500. Comparatively, Foot Locker has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Summary

Foot Locker beats Francesca’s Holdings Corporation on 13 of the 17 factors compared between the two stocks.

Francesca’s Holdings Corporation Company Profile

Francesca’s Holdings Corporation is a holding company. The Company is a specialty retailer, which operates a chain of boutiques across the United States. The Company offers a mix of apparel, jewelry, accessories and gifts. As of January 28, 2017, the Company operated 671 boutiques in 48 states and the District of Columbia, and also served its customers through www.francescas.com, its e-commerce Website. The Company offers apparel, such as dresses, fashion tops, sweaters, cardigans and wraps, bottoms, outerwear and jackets, tees and tanks, and intimates. The Company provides jewelry, such as necklaces, earrings, bracelets and rings. The Company offers accessories, such as handbags, clutches, wallets, shoes, belts, hats, scarves, sunglasses, watches and hair accessories. The Company provides gifts, such as fragrance, candles, bath and body, home accessories, books, wall art, nail polish and miscellaneous items. The Company operates its boutiques under the francesca’s brand.

Foot Locker Company Profile

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).

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