Shoe Carnival (NASDAQ:SCVL) versus Ermenegildo Zegna (NYSE:ZGN) Critical Review

Ermenegildo Zegna (NYSE:ZGN) and Shoe Carnival (NASDAQ:SCVL) are both retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, valuation, profitability, analyst recommendations, dividends, earnings and institutional ownership.

Profitability

This table compares Ermenegildo Zegna and Shoe Carnival’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ermenegildo Zegna	N/A	N/A	N/A
Shoe Carnival	3.31%	7.24%	4.19%

Insider and Institutional Ownership

12.9% of Ermenegildo Zegna shares are owned by institutional investors. Comparatively, 66.1% of Shoe Carnival shares are owned by institutional investors. 1.2% of Ermenegildo Zegna shares are owned by insiders. Comparatively, 33.6% of Shoe Carnival shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Ermenegildo Zegna and Shoe Carnival, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ermenegildo Zegna	0	4	5	0	2.56
Shoe Carnival	0	1	0	2	3.33

Ermenegildo Zegna presently has a consensus price target of $13.01, indicating a potential downside of 4.65%. Shoe Carnival has a consensus price target of $22.00, indicating a potential upside of 26.26%. Given Shoe Carnival’s stronger consensus rating and higher probable upside, analysts clearly believe Shoe Carnival is more favorable than Ermenegildo Zegna.

Valuation & Earnings

This table compares Ermenegildo Zegna and Shoe Carnival”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ermenegildo Zegna	$2.17 billion	2.66	$111.54 million	N/A	N/A
Shoe Carnival	$1.13 billion	0.42	$52.27 million	$1.35	12.91

Ermenegildo Zegna has higher revenue and earnings than Shoe Carnival.

Volatility & Risk

Ermenegildo Zegna has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Shoe Carnival has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500.

Summary

Shoe Carnival beats Ermenegildo Zegna on 9 of the 13 factors compared between the two stocks.

About Ermenegildo Zegna

Ermenegildo Zegna N.V., together with its subsidiaries, designs, manufactures, markets, and distributes luxury menswear, footwear, leather goods, and other accessories under the Zegna and the Thom Browne brands. It provides luxury leisurewear for men; formal suits, tuxedos, shirts, blazers, formal overcoats, and accessories; leather accessories comprising shoes, bags, belts, and small leather accessories; and fragrances. The company also offers luxury womenswear and childrenswear under the Thom Browne brand, as well as provides eyewear, cufflinks and jewelry, watches, underwear, and beachwear manufactured by third parties under licenses. It serves customers through its retail stores and online channels in Europe, the Middle East, Africa, North America, Latin America, the Asia Pacific, and internationally. The company was founded in 1910 and is based in Trivero, Italy. Ermenegildo Zegna N.V. operates as a subsidiary of Monterubello Societa’ Semplice.

About Shoe Carnival

Shoe Carnival, Inc., together with its subsidiaries, operates as a family footwear retailer in the United States. The company offers range of dress, casual, work, and athletic shoes, as well as sandals and boots for men, women, and children; and various accessories. The company also operates stores, and sells its products through online shopping at shoecarnival.com, as well as through mobile app. Shoe Carnival, Inc. was founded in 1978 and is headquartered in Evansville, Indiana.