Foot Locker (NYSE: FL) and Stein Mart (NASDAQ:SMRT) are both cyclical consumer goods & services companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.
This table compares Foot Locker and Stein Mart’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation and Earnings
This table compares Foot Locker and Stein Mart’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Foot Locker||$7.77 billion||0.77||$664.00 million||$3.97||12.39|
|Stein Mart||$1.36 billion||0.02||$400,000.00||($0.62)||-1.02|
Foot Locker has higher revenue and earnings than Stein Mart. Stein Mart is trading at a lower price-to-earnings ratio than Foot Locker, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and target prices for Foot Locker and Stein Mart, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Foot Locker currently has a consensus target price of $56.12, suggesting a potential upside of 14.13%. Given Foot Locker’s higher possible upside, equities analysts plainly believe Foot Locker is more favorable than Stein Mart.
Institutional & Insider Ownership
89.8% of Foot Locker shares are owned by institutional investors. Comparatively, 20.6% of Stein Mart shares are owned by institutional investors. 2.9% of Foot Locker shares are owned by company insiders. Comparatively, 34.7% of Stein Mart shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Volatility & Risk
Foot Locker has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500. Comparatively, Stein Mart has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500.
Foot Locker pays an annual dividend of $1.24 per share and has a dividend yield of 2.5%. Stein Mart pays an annual dividend of $0.08 per share and has a dividend yield of 12.7%. Foot Locker pays out 31.2% of its earnings in the form of a dividend. Stein Mart pays out -12.9% 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. Foot Locker has raised its dividend for 7 consecutive years. Stein Mart is clearly the better dividend stock, given its higher yield and lower payout ratio.
Foot Locker beats Stein Mart on 13 of the 16 factors compared between the two stocks.
About Foot Locker
Foot Locker, Inc. is a retailer of shoes and apparel. The Company operates through two segments: Athletic Stores and Direct-to-Customers. The Company is an athletic footwear and apparel retailer, which include businesses, such as include Foot Locker, Kids Foot Locker, Lady Foot Locker, Champs Sports, Footaction, Runners Point, Sidestep and SIX:02. The Direct-to-Customers segment is multi-branded and sells directly to customers through Internet and mobile sites and catalogs. The Direct-to-Customers segment operates the Websites for eastbay.com, final-score.com, eastbayteamsales.com and sp24.com. Additionally, this segment includes the Websites, both desktop and mobile, aligned with the brand names of its store banners (footlocker.com, ladyfootlocker.com, six02.com kidsfootlocker.com, champssports.com, footaction.com, footlocker.ca, footlocker.eu, runnerspoint.com and sidestep-shoes.com).
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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