Stein Mart (NASDAQ: SMRT) and Francesca’s Holdings Corporation (NASDAQ:FRAN) are both small-cap retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.
Volatility and Risk
Stein Mart has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500. Comparatively, Francesca’s Holdings Corporation has a beta of 0.18, indicating that its share price is 82% less volatile than the S&P 500.
Institutional & Insider Ownership
31.4% of Stein Mart shares are held by institutional investors. 34.7% of Stein Mart shares are held by company insiders. Comparatively, 1.2% of Francesca’s Holdings Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Stein Mart and Francesca’s Holdings Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Stein Mart||$1.36 billion||0.04||$400,000.00||($0.62)||-1.84|
|Francesca’s Holdings Corporation||$487.19 million||0.56||$42.00 million||$0.97||7.66|
Francesca’s Holdings Corporation has higher revenue, but lower earnings than Stein Mart. Stein Mart is trading at a lower price-to-earnings ratio than Francesca’s Holdings Corporation, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations and price targets for Stein Mart and Francesca’s Holdings Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Francesca’s Holdings Corporation||0||6||2||0||2.25|
Francesca’s Holdings Corporation has a consensus target price of $13.50, suggesting a potential upside of 81.70%. Given Francesca’s Holdings Corporation’s higher possible upside, analysts clearly believe Francesca’s Holdings Corporation is more favorable than Stein Mart.
This table compares Stein Mart and Francesca’s Holdings Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Francesca’s Holdings Corporation||7.28%||31.88%||18.83%|
Stein Mart pays an annual dividend of $0.15 per share and has a dividend yield of 13.2%. Francesca’s Holdings Corporation does not pay a dividend. Stein Mart pays out -24.2% of its earnings in the form of a dividend.
Francesca’s Holdings Corporation beats Stein Mart on 8 of the 14 factors compared between the two stocks.
Stein Mart Company Profile
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.
Francesca’s Holdings Corporation Company Profile
Francesca’s Holdings Corporation is a holding company. The Company is a specialty retailer, which operates a chain of boutiques across the United States. The Company offers a mix of apparel, jewelry, accessories and gifts. As of January 28, 2017, the Company operated 671 boutiques in 48 states and the District of Columbia, and also served its customers through www.francescas.com, its e-commerce Website. The Company offers apparel, such as dresses, fashion tops, sweaters, cardigans and wraps, bottoms, outerwear and jackets, tees and tanks, and intimates. The Company provides jewelry, such as necklaces, earrings, bracelets and rings. The Company offers accessories, such as handbags, clutches, wallets, shoes, belts, hats, scarves, sunglasses, watches and hair accessories. The Company provides gifts, such as fragrance, candles, bath and body, home accessories, books, wall art, nail polish and miscellaneous items. The Company operates its boutiques under the francesca’s brand.
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