Financial Analysis: Lands’ End (NASDAQ:LE) and National Vision (NASDAQ:EYE)

National Vision (NASDAQ:EYE) and Lands’ End (NASDAQ:LE) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, analyst recommendations, dividends, institutional ownership and profitability.

Earnings and Valuation

This table compares National Vision and Lands’ End”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Vision	$2.03 billion	0.70	$29.60 million	$0.61	29.34
Lands’ End	$1.32 billion	0.21	$5.51 million	$11.24	0.83

National Vision has higher revenue and earnings than Lands’ End. Lands’ End is trading at a lower price-to-earnings ratio than National Vision, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and target prices for National Vision and Lands’ End, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Vision	0	4	7	0	2.64
Lands’ End	0	1	1	0	2.50

National Vision presently has a consensus price target of $29.82, suggesting a potential upside of 66.58%. Lands’ End has a consensus price target of $20.00, suggesting a potential upside of 114.36%. Given Lands’ End’s higher possible upside, analysts clearly believe Lands’ End is more favorable than National Vision.

Insider & Institutional Ownership

37.5% of Lands’ End shares are held by institutional investors. 2.4% of National Vision shares are held by insiders. Comparatively, 2.1% of Lands’ End shares are held by 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.

Profitability

This table compares National Vision and Lands’ End’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Vision	2.47%	6.78%	3.01%
Lands’ End	26.62%	7.96%	3.38%

Risk and Volatility

National Vision has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, Lands’ End has a beta of 2.27, meaning that its share price is 127% more volatile than the S&P 500.

About National Vision

National Vision Holdings, Inc., through its subsidiaries, operates as an optical retailer in the United States. The company operates in two segments, Owned & Host and Legacy. It offers eyeglasses and contact lenses, and optical accessory products; provides eye exams through its America’s Best, Eyeglass World, Vista Optical, Fred Meyer, and Vista Optical military, as well as Vision Center branded stores; and offers health maintenance organization and optometric services. National Vision Holdings, Inc. was founded in 1990 and is headquartered in Duluth, Georgia.

About Lands’ End

Lands’ End, Inc. operates as a digital retailer of apparel, swimwear, outerwear, accessories, footwear, home products, and uniform in the United States, Europe, Asia, and internationally. It operates through U.S. eCommerce, International, Outfitters, Third Party, and Retail segments. The company also sells uniform and logo apparel. It sells its products through e-commerce and company operated stores, as well as through third party distribution channels under the Lands’ End, Lands’ End Lighthouse, Squall, Tugless Tank, Drifter, Outrigger, and Marinac, Beach Living brands, as well as Supima, No-Gape, Starfish, Little Black Suit, Iron Knees, Hyde Park, Year’ Rounder, ClassMate, Willis & Geiger, and ThermaCheck brands. Lands’ End, Inc. was founded in 1963 and is headquartered in Dodgeville, Wisconsin.