Analyzing Children’s Place (NASDAQ:PLCE) & Boot Barn (NYSE:BOOT)

Boot Barn (NYSE:BOOT) and Children’s Place (NASDAQ:PLCE) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Volatility and Risk

Boot Barn has a beta of 1.67, meaning that its stock price is 67% more volatile than the S&P 500. Comparatively, Children’s Place has a beta of 2.25, meaning that its stock price is 125% more volatile than the S&P 500.

Profitability

This table compares Boot Barn and Children’s Place’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Boot Barn	10.05%	18.41%	10.20%
Children’s Place	-2.04%	-10.32%	-2.45%

Valuation and Earnings

This table compares Boot Barn and Children’s Place”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Boot Barn	$2.07 billion	2.53	$180.94 million	$6.76	25.39
Children’s Place	$1.34 billion	0.13	-$57.82 million	($0.86)	-8.93

Boot Barn has higher revenue and earnings than Children’s Place. Children’s Place is trading at a lower price-to-earnings ratio than Boot Barn, indicating that it is currently the more affordable of the two stocks.

Dividends

Boot Barn pays an annual dividend of $0.50 per share and has a dividend yield of 0.3%. Children’s Place pays an annual dividend of $2.24 per share and has a dividend yield of 29.2%. Boot Barn pays out 7.4% of its earnings in the form of a dividend. Children’s Place pays out -260.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Children’s Place is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current recommendations and price targets for Boot Barn and Children’s Place, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Boot Barn	0	4	11	1	2.81
Children’s Place	1	1	0	0	1.50

Boot Barn currently has a consensus target price of $195.75, suggesting a potential upside of 14.05%. Children’s Place has a consensus target price of $8.00, suggesting a potential upside of 4.17%. Given Boot Barn’s stronger consensus rating and higher probable upside, equities analysts plainly believe Boot Barn is more favorable than Children’s Place.

Summary

Boot Barn beats Children’s Place on 12 of the 15 factors compared between the two stocks.

About Boot Barn

Boot Barn Holdings, Inc., a lifestyle retail chain, operates specialty retail stores in the United States. The company's specialty retail stores offer western and work-related footwear, apparel, and accessories for men, women, and kids. It offers boots, shirts, jackets, hats, belts and belt buckles, handbags, western-style jewelry, rugged footwear, outerwear, overalls, denim, and flame-resistant and high-visibility clothing. The company also provides gifts and home merchandise. The company also sells its products through e-commerce websites, including bootbarn.com; sheplers.com; and countryoutfitter.com. The company was formerly known as WW Top Investment Corporation and changed its name to Boot Barn Holdings, Inc. in June 2014. Boot Barn Holdings, Inc. was founded in 1978 and is based in Irvine, California.

About Children’s Place

The Children’s Place, Inc. engages in the provision of apparel, footwear, accessories, and other items for children. The firm also designs contracts to manufacture and sell fashionable and value-priced merchandise under the brand names of The Children’s Place, Baby Place, and Gymboree. It operates through The Children’s Place U.S. and The Children’s Place International segments. The Children’s Place U.S. segment refers to the company’s U.S. and Puerto Rico-based stores and revenue from its U.S. based wholesale business. The Children’s Place International segment is involved in the Canadian-based stores, revenue from the company’s Canadian-based wholesale business, as well as revenue from international franchisees. The company was founded by David Pulver and Clinton A. Clark in 1969 and is headquartered in Secaucus, NJ.