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

Institutional & Insider Ownership

93.6% of Genesco shares are held by institutional investors. Comparatively, 52.1% of Sequential Brands Group shares are held by institutional investors. 3.3% of Genesco shares are held by company insiders. Comparatively, 27.3% of Sequential Brands Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Genesco has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500. Comparatively, Sequential Brands Group has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500.

Valuation & Earnings

This table compares Genesco and Sequential Brands Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Genesco $2.85 billion 0.18 $184.95 million $3.53 7.21
Sequential Brands Group $168.91 million 0.95 $101.48 million $0.02 128.06

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

Analyst Ratings

This is a breakdown of current ratings and price targets for Genesco and Sequential Brands Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genesco 0 4 3 0 2.43
Sequential Brands Group 0 2 4 0 2.67

Genesco presently has a consensus target price of $32.71, indicating a potential upside of 28.54%. Sequential Brands Group has a consensus target price of $8.00, indicating a potential upside of 212.50%. Given Sequential Brands Group’s stronger consensus rating and higher possible upside, analysts plainly believe Sequential Brands Group is more favorable than Genesco.

Profitability

This table compares Genesco and Sequential Brands Group’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%
Sequential Brands Group 0.99% 1.29% 0.49%

Summary

Genesco beats Sequential Brands Group on 8 of the 14 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.

Sequential Brands Group Company Profile

Sequential Brands Group, Inc. owns a portfolio of consumer brands in the fashion, home, athletic and lifestyle categories. The Company’s portfolio of consumer brands includes Martha Stewart, Emeril Lagasse, Jessica Simpson, Joe’s Jeans, William Rast, Ellen Tracy, Revo, AND1 and Avia. The Company’s brands are licensed for a range of product categories, including apparel, footwear, eyewear, fashion accessories and home goods. The Company licenses brands to both wholesale and direct-to-retail licensees. The Company licenses the Martha Stewart brand to various licensees, including retailers, such as Macy’s, The Home Depot, PetSmart and Staples. The Jessica Simpson Collection is a signature lifestyle concept designed in collaboration with Jessica Simpson, which offers various product categories, including footwear, apparel, fragrance, fashion accessories, maternity apparel, girls clothing and a home line. The Avia brand offers running and activewear products.

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