Sequential Brands Group (NASDAQ: SQBG) and Foot Locker (NYSE:FL) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.
This table compares Sequential Brands Group and Foot Locker’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Sequential Brands Group||-14.35%||2.26%||0.85%|
This is a breakdown of recent recommendations and price targets for Sequential Brands Group and Foot Locker, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Sequential Brands Group||0||4||3||0||2.43|
Sequential Brands Group currently has a consensus target price of $6.92, indicating a potential upside of 277.96%. Foot Locker has a consensus target price of $53.86, indicating a potential upside of 13.50%. Given Sequential Brands Group’s stronger consensus rating and higher probable upside, research analysts plainly believe Sequential Brands Group is more favorable than Foot Locker.
Insider and Institutional Ownership
50.3% of Sequential Brands Group shares are owned by institutional investors. Comparatively, 89.9% of Foot Locker shares are owned by institutional investors. 27.3% of Sequential Brands Group shares are owned by insiders. Comparatively, 2.9% of Foot Locker shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Risk & Volatility
Sequential Brands Group has a beta of 0.46, meaning that its share price is 54% less volatile than the S&P 500. Comparatively, Foot Locker has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.
Earnings and Valuation
This table compares Sequential Brands Group and Foot Locker’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Sequential Brands Group||$155.53 million||0.74||-$820,000.00||($0.38)||-4.82|
|Foot Locker||$7.77 billion||0.74||$664.00 million||$3.97||11.95|
Foot Locker has higher revenue and earnings than Sequential Brands Group. Sequential Brands Group is trading at a lower price-to-earnings ratio than Foot Locker, indicating that it is currently the more affordable of the two stocks.
Foot Locker pays an annual dividend of $1.24 per share and has a dividend yield of 2.6%. Sequential Brands Group does not pay a dividend. Foot Locker pays out 31.2% of its earnings in the form of a dividend. Sequential Brands Group has increased its dividend for 7 consecutive years.
Foot Locker beats Sequential Brands Group on 11 of the 17 factors compared between the two stocks.
About Sequential Brands Group
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.
About Foot Locker
Foot Locker, Inc. is a retailer of shoes and apparel. The Company operates through two segments: Athletic Stores and Direct-to-Customers. The Company is an athletic footwear and apparel retailer, which include businesses, such as include Foot Locker, Kids Foot Locker, Lady Foot Locker, Champs Sports, Footaction, Runners Point, Sidestep and SIX:02. The Direct-to-Customers segment is multi-branded and sells directly to customers through Internet and mobile sites and catalogs. The Direct-to-Customers segment operates the Websites for eastbay.com, final-score.com, eastbayteamsales.com and sp24.com. Additionally, this segment includes the Websites, both desktop and mobile, aligned with the brand names of its store banners (footlocker.com, ladyfootlocker.com, six02.com kidsfootlocker.com, champssports.com, footaction.com, footlocker.ca, footlocker.eu, runnerspoint.com and sidestep-shoes.com).
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