XCel Brands (NASDAQ:XELB) and Quarterhill (OTCMKTS:QTRHF) are both small-cap retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitability.

Institutional & Insider Ownership

5.3% of XCel Brands shares are held by institutional investors. Comparatively, 10.2% of Quarterhill shares are held by institutional investors. 62.4% of XCel Brands shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares XCel Brands and Quarterhill’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
XCel Brands 3.98% 3.46% 2.38%
Quarterhill -11.31% -6.62% -5.54%

Analyst Recommendations

This is a breakdown of current recommendations for XCel Brands and Quarterhill, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
XCel Brands 0 1 0 0 2.00
Quarterhill 0 1 0 0 2.00

Quarterhill has a consensus price target of $2.40, suggesting a potential upside of 58.42%. Given Quarterhill’s higher probable upside, analysts plainly believe Quarterhill is more favorable than XCel Brands.

Volatility and Risk

XCel Brands has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500. Comparatively, Quarterhill has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Earnings and Valuation

This table compares XCel Brands and Quarterhill’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
XCel Brands $35.47 million 0.79 $1.09 million $0.20 7.42
Quarterhill $77.40 million 2.33 -$49.12 million ($0.24) -6.31

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

Summary

XCel Brands beats Quarterhill on 8 of the 12 factors compared between the two stocks.

About XCel Brands

Xcel Brands, Inc., together with its subsidiaries, operates as a consumer products company in the United States. The company designs, produces, licenses, markets, and sells branded apparel, footwear, accessories, jewelry, home goods, and other consumer products; and acquires consumer lifestyle brands, including the Isaac Mizrahi, the Judith Ripka, the H Halston, the C Wonder, and the Highline Collective brands. It licenses its brands to third parties; and provides design, production, and marketing services for promotion and distribution through a ubiquitous-channel retail sales strategy, including distribution through interactive television, the Internet, and traditional brick-and-mortar retail channels. The company also offers social media marketing and other marketing, and public relations support for its brands. In addition, it markets the Mizrahi brands through isaacmizrahi.com; the Ripka brands through judithripka.com; and the C Wonder brands through cwonder.com. Xcel Brands, Inc. is headquartered in New York, New York.

About Quarterhill

Quarterhill Inc. focuses on acquisition and management of technology companies that provides products and services worldwide. Its Licensing segment includes patents relating to 3D television, semiconductor manufacturing and packaging, medical stent, intelligent personal assistant, enhanced image processing, streaming video, non-volatile flash and other memory, semiconductor clocking, LED lighting, and various other technologies; automotive headlight assemblies, phased loop semiconductor licensing, microcontrollers applicable to safety-critical aerospace, computer gaming, CMOS image sensors, building automation, and smart meter monitoring; and medical, industrial, and automotive applications. The company's Intelligent Systems segment provides integrated systems and solutions, such as automated truck weigh stations; toll road systems and equipment; traffic management and safety systems; VectorSense, a tire sensor suite; Vehicle Information-In-Motion, a traffic intelligence system; integrated traffic control systems; permanent and portable slow speed weigh-in-motion systems; portable wheel load scales; traffic data collection products; vehicle and axle detection equipment; and automated vehicle identification, and other hardware and software products for the intelligent transportation systems industry. This segment serves through direct salespeople, distributors, agents, other contractors, and systems integrators. Its Enterprise Software segment provides enterprise asset management software solutions to asset intensive industries through its salesforce over the Internet. Its offerings include WorkAlign, a product suite, which consists of integrated products, such as scheduler, IIoT, mobile for EAM, maintenance budgeting, warranty tracker, and analytics; and consulting services. The company was formerly known as Wi-LAN Inc. and changed its name to Quarterhill Inc. in June 2017. Quarterhill Inc. was incorporated in 1992 and is headquartered in Kitchener, Canada.

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