Stein Mart (NASDAQ: SMRT) and Sequential Brands Group (NASDAQ:SQBG) are both small-cap cyclical consumer goods & services companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.

Volatility & Risk

Stein Mart has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, Sequential Brands Group has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Stein Mart and Sequential Brands Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stein Mart 0 0 0 0 N/A
Sequential Brands Group 0 4 3 0 2.43

Sequential Brands Group has a consensus target price of $6.92, indicating a potential upside of 343.38%. Given Sequential Brands Group’s higher probable upside, analysts clearly believe Sequential Brands Group is more favorable than Stein Mart.

Dividends

Stein Mart pays an annual dividend of $0.15 per share and has a dividend yield of 12.6%. Sequential Brands Group does not pay a dividend. Stein Mart pays out -24.2% of its earnings in the form of a dividend.

Insider and Institutional Ownership

20.3% of Stein Mart shares are owned by institutional investors. Comparatively, 50.3% of Sequential Brands Group shares are owned by institutional investors. 34.7% of Stein Mart shares are owned by company insiders. Comparatively, 27.3% of Sequential Brands Group shares are owned by company 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.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Stein Mart $1.36 billion 0.04 $400,000.00 ($0.62) -1.92
Sequential Brands Group $155.53 million 0.63 -$820,000.00 ($0.38) -4.11

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

Profitability

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

Net Margins Return on Equity Return on Assets
Stein Mart -2.18% -44.60% -5.30%
Sequential Brands Group -14.35% 2.26% 0.85%

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.

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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