Foot Locker (NYSE: FL) and Xcel Brands (NASDAQ:XELB) are both retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, earnings, profitability and institutional ownership.

Profitability

This table compares Foot Locker and Xcel Brands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Foot Locker 7.49% 21.52% 15.50%
Xcel Brands 8.38% 0.99% 0.70%

Earnings & Valuation

This table compares Foot Locker and Xcel Brands’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Foot Locker $7.70 billion 0.50 $1.06 billion $4.34 7.14
Xcel Brands $32.08 million 1.76 $4.00 million $0.14 25.36

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

Institutional & Insider Ownership

96.6% of Foot Locker shares are owned by institutional investors. Comparatively, 17.3% of Xcel Brands shares are owned by institutional investors. 2.9% of Foot Locker shares are owned by company insiders. Comparatively, 59.9% of Xcel Brands shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Foot Locker has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500. Comparatively, Xcel Brands has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500.

Dividends

Foot Locker pays an annual dividend of $1.24 per share and has a dividend yield of 4.0%. Xcel Brands 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.

Analyst Ratings

This is a breakdown of current ratings for Foot Locker and Xcel Brands, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Foot Locker 1 12 11 0 2.42
Xcel Brands 0 0 1 0 3.00

Foot Locker currently has a consensus price target of $63.27, suggesting a potential upside of 104.15%. Xcel Brands has a consensus price target of $4.50, suggesting a potential upside of 26.76%. Given Foot Locker’s higher possible upside, equities research analysts plainly believe Foot Locker is more favorable than Xcel Brands.

Summary

Foot Locker beats Xcel Brands on 11 of the 17 factors compared between the two stocks.

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).

Xcel Brands Company Profile

Xcel Brands, Inc. is a brand development and media company. The Company is engaged in the design, production, licensing, marketing, and direct to consumer sales of branded apparel, footwear, accessories, jewelry, home goods, and other consumer products, and the acquisition of consumer lifestyle brands. The Company’s brand portfolio consists of the Isaac Mizrahi, Judith Ripka, H Halston, C Wonder and Highline Collective brands. The Company also manages and designs the Liz Claiborne New York brand (LCNY Brand). Isaac Mizrahi has over 150 different product categories, including sportswear, footwear, handbags, watches, eyewear, fragrance, tech accessories, intimates, bridal gowns and accessories, pet products, home and other merchandise. The Company’s Judith Ripka is a luxury jewelry brand. Wonder brand offers women’s clothing, footwear, jewelry and accessories; housewares, and home decor and gifts. The Liz Claiborne New York includes women’s apparel, footwear, outerwear and accessories.

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