Analyzing Lovesac (NASDAQ:LOVE) and Signet Jewelers (NYSE:SIG)

Lovesac (NASDAQ:LOVE) and Signet Jewelers (NYSE:SIG) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Risk and Volatility

Lovesac has a beta of 2.17, indicating that its share price is 117% more volatile than the S&P 500. Comparatively, Signet Jewelers has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Lovesac and Signet Jewelers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lovesac	0	1	3	0	2.75
Signet Jewelers	0	5	6	1	2.67

Lovesac presently has a consensus price target of $21.33, suggesting a potential upside of 37.72%. Signet Jewelers has a consensus price target of $125.56, suggesting a potential upside of 6.91%. Given Lovesac’s stronger consensus rating and higher possible upside, research analysts plainly believe Lovesac is more favorable than Signet Jewelers.

Profitability

This table compares Lovesac and Signet Jewelers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lovesac	2.56%	2.57%	1.02%
Signet Jewelers	5.19%	23.28%	7.61%

Valuation & Earnings

This table compares Lovesac and Signet Jewelers”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lovesac	$697.65 million	0.32	$4.07 million	$1.22	12.70
Signet Jewelers	$6.81 billion	0.66	$294.40 million	$8.68	13.53

Signet Jewelers has higher revenue and earnings than Lovesac. Lovesac is trading at a lower price-to-earnings ratio than Signet Jewelers, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

91.3% of Lovesac shares are held by institutional investors. 7.8% of Lovesac shares are held by insiders. Comparatively, 1.2% of Signet Jewelers shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Signet Jewelers beats Lovesac on 10 of the 15 factors compared between the two stocks.

About Lovesac

The Lovesac Company designs, manufactures, and sells furniture. It offers sactionals, such as seats and sides; sacs, including foam beanbag chairs; and other products comprising drink holders, footsac blankets, decorative pillows, fitted seat tables, and ottomans. The company markets its products primarily through www.lovesac.com website, as well as showrooms at top tier malls, lifestyle centers, mobile concierges, kiosks, and street locations in 41 states in the United States; and in store pop-up- shops and shop-in-shops, and barter inventory transactions. The Lovesac Company was founded in 1995 and is based in Stamford, Connecticut.

About Signet Jewelers

Signet Jewelers Limited operates as a diamond jewelry retailer. It operates through three segments: North America, International, and Other. The North America segment operates jewelry stores in jewelry stores in malls, mall-based kiosks, and off-mall locations in the United States and Canada primarily under the Kay Jewelers, Kay Jewelers Outlet, Jared The Galleria Of Jewelry, Jared Vault, Zales Outlet, Zales Jewelers, Diamonds Direct, James Allen, Banter by Piercing Pagoda, and Peoples Jewellers names, as well as operates online through its digital banners, James Allen and Blue Nile. This segment also engages in jewelry subscription business. The International segment operates stores in shopping malls and off-mall locations primarily under the H.Samuel and Ernest Jones brands in the United Kingdom, Republic of Ireland, and Channel Islands. The Other segment is involved in the purchase and conversion of rough diamonds to polished stones, as well as the provision of diamond polishing services. Signet Jewelers Limited is based in Hamilton, Bermuda.