Five Below (NASDAQ:FIVE) & Destination XL Group (NASDAQ:DXLG) Critical Survey

Destination XL Group (NASDAQ:DXLG) and Five Below (NASDAQ:FIVE) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, risk, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Profitability

This table compares Destination XL Group and Five Below’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Destination XL Group	-8.77%	-9.05%	-2.75%
Five Below	11.65%	22.13%	9.86%

Valuation and Earnings

This table compares Destination XL Group and Five Below”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Destination XL Group	$435.02 million	0.06	-$35.91 million	($0.69)	-0.64
Five Below	$4.76 billion	2.79	$358.64 million	$11.14	21.66

Five Below has higher revenue and earnings than Destination XL Group. Destination XL Group is trading at a lower price-to-earnings ratio than Five Below, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

73.5% of Destination XL Group shares are held by institutional investors. 14.3% of Destination XL Group shares are held by company insiders. Comparatively, 1.0% of Five Below shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Destination XL Group has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, Five Below has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Destination XL Group and Five Below, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Destination XL Group	1	0	1	0	2.00
Five Below	0	13	19	0	2.59

Destination XL Group presently has a consensus price target of $1.25, suggesting a potential upside of 182.74%. Five Below has a consensus price target of $300.45, suggesting a potential upside of 24.53%. Given Destination XL Group’s higher probable upside, analysts plainly believe Destination XL Group is more favorable than Five Below.

Summary

Five Below beats Destination XL Group on 10 of the 14 factors compared between the two stocks.

About Destination XL Group

Destination XL Group, Inc., together with its subsidiaries, operates as a specialty retailer of big and tall men’s clothing and shoes in the United States. The company’s stores offer sportswear and dresswear; fashion-neutral items, including jeans, casual pants, T-shirts, polo shirts, dress shirts, and suit separates; and casual clothing. It also provides vintage-screen T-shirts and wovens under various private labels. The company offers its products under the trade names of Destination XL, DXL, DXL Men’s Apparel, DXL outlets, Casual Male XL, and Casual Male XL outlets. The company was formerly known as Casual Male Retail Group, Inc. and changed its name to Destination XL Group, Inc. in February 2013. Destination XL Group, Inc. was incorporated in 1976 and is headquartered in Canton, Massachusetts.

About Five Below

Five Below, Inc. operates as a specialty value retailer in the United States. The company offers range of accessories, which includes novelty socks, sunglasses, jewelry, scarves, gloves, hair accessories, athletic tops and bottoms, and t-shirts, as well as nail polish, lip gloss, fragrance, and branded cosmetics; and personalized living space products, such as lamps, posters, frames, fleece blankets, plush items, pillows, candles, incense, lighting, novelty décor, accent furniture, and related items, as well as provides storage options. It provides assortment of sports balls, team sports merchandise, and fitness accessories comprising hand weights, jump ropes, and gym balls; various games, such as board games, puzzles, collectibles, and toys, including remote control; and summer season sports, which includes pool, beach, and outdoor toys, as well as games and accessories. In addition, the company offers accessories for cell phones, tablets, audio, and computers, as well as cases, chargers, headphones, and other related items; and media products including books, video games, and DVDs. It also provides assortment of craft activity kits, and arts and crafts supplies, such as crayons, markers, and stickers; and school products comprising backpacks, fashion notebooks and journals, novelty pens and pencils, and locker accessories. Further, the company offers party products, which includes party goods, decorations, gag gifts, and greeting cards, as well as every day and special occasion merchandise; assortment of classic and novelty candy bars, movie-size box candy, seasonal-related candy, and gum and snack food products, as well as sells chilled drinks through coolers; and provides seasonally specific items used to celebrate and decorate for events. The company was formerly known as Cheap Holdings, Inc. and changed its name to Five Below, Inc. in August 2002. Five Below, Inc. was incorporated in 2002 and is headquartered in Philadelphia, Pennsylvania.