L Brands (NYSE: LB) and Genesco (NYSE:GCO) are both cyclical consumer goods & services companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, dividends, risk, institutional ownership, valuation, analyst recommendations and earnings.

Volatility and Risk

L Brands has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, Genesco has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500.

Valuation & Earnings

This table compares L Brands and Genesco’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
L Brands $12.57 billion 1.10 $1.16 billion $3.28 14.95
Genesco $2.87 billion 0.24 $97.43 million ($6.30) -5.54

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

Profitability

This table compares L Brands and Genesco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
L Brands 7.73% -101.19% 11.49%
Genesco -4.24% 6.93% 4.03%

Institutional & Insider Ownership

78.8% of L Brands shares are owned by institutional investors. Comparatively, 97.7% of Genesco shares are owned by institutional investors. 16.7% of L Brands shares are owned by insiders. Comparatively, 3.3% of Genesco shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

L Brands pays an annual dividend of $2.40 per share and has a dividend yield of 4.9%. Genesco does not pay a dividend. L Brands pays out 73.2% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for L Brands and Genesco, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
L Brands 4 17 12 0 2.24
Genesco 0 4 4 0 2.50

L Brands presently has a consensus target price of $51.94, indicating a potential upside of 5.95%. Genesco has a consensus target price of $36.25, indicating a potential upside of 3.87%. Given L Brands’ higher probable upside, research analysts clearly believe L Brands is more favorable than Genesco.

Summary

L Brands beats Genesco on 11 of the 16 factors compared between the two stocks.

L Brands Company Profile

L Brands, Inc. operates specialty retail business. The Company is focused on women’s intimate and other apparel, personal care, beauty and home fragrance categories. Its segments include Victoria’s Secret, Bath & Body Works, and Victoria’s Secret and Bath & Body Works International. It sells its merchandise through company-owned specialty retail stores in the United States, Canada, the United Kingdom and Greater China, which are mall-based; through Websites, and through international franchise, license and wholesale partners. It operates in the retail brands, which include Victoria’s Secret, PINK, Bath & Body Works and La Senza. La Senza is a specialty retailer of women’s intimate apparel. It sells its La Senza products at over 120 La Senza stores in Canada. Henri Bendel sells handbags, jewelry and other accessory products through New York and 28 other stores. Mast Global is a merchandise sourcing and production function serving the Company and its international partners.

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.

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