Analyzing L Brands (LTD) & Stein Mart (SMRT)

L Brands (NYSE: LTD) and Stein Mart (NASDAQ:SMRT) are both cyclical consumer goods & services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, valuation, earnings and dividends.

Dividends

Stein Mart pays an annual dividend of $0.15 per share and has a dividend yield of 12.6%. L Brands does not pay a dividend. Stein Mart pays out -27.3% of its earnings in the form of a dividend.

Insider & Institutional Ownership

33.0% of Stein Mart shares are held by institutional investors. 34.7% of Stein Mart shares are held 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.

Analyst Recommendations

This is a summary of current ratings and price targets for L Brands and Stein Mart, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
L Brands 0 0 0 0 N/A
Stein Mart 0 0 0 0 N/A

Profitability

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

Net Margins Return on Equity Return on Assets
L Brands 5.05% N/A 7.13%
Stein Mart -1.89% -34.59% -4.43%

Earnings and Valuation

This table compares L Brands and Stein Mart’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
L Brands N/A N/A N/A N/A N/A
Stein Mart $1.33 billion 0.04 $326,000.00 ($0.55) -2.16

Stein Mart has higher revenue and earnings than L Brands.

Summary

Stein Mart beats L Brands on 5 of the 8 factors compared between the two stocks.

About L Brands

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.

About Stein Mart

Stein Mart, Inc. is a national retailer offering the fashion merchandise, service and presentation of a department or specialty store. The Company offers apparel for women and men, as well as accessories, shoes and home fashions. The Company’s target customers are women over 45 years old. The Company operates approximately 280 stores in over 30 states and an Internet store. Its stores are located in the Northeast, Midwest, Southeast, Texas and the Southwest. It is concentrated in the Southeast and Texas where over 180 of its stores are located. The Company’s stores offer a range of services, such as merchandise locator service, a Preferred Customer program, co-branded and private label credit card programs, and electronic gift cards. The Company’s merchants purchase products from approximately 1,200 vendors. It leases all of its store locations, generally for approximately 10 years with options to extend the lease term for over two or five year periods.

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