Reviewing Destination XL Group (NASDAQ:DXLG) & Lithia Motors (NYSE:LAD)

Lithia Motors (NYSE:LAD) and Destination XL Group (NASDAQ:DXLG) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, dividends, institutional ownership, profitability, valuation, analyst recommendations and risk.

Profitability

This table compares Lithia Motors and Destination XL Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lithia Motors	1.88%	12.16%	3.14%
Destination XL Group	-8.77%	-9.05%	-2.75%

Analyst Recommendations

This is a summary of recent ratings and target prices for Lithia Motors and Destination XL Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lithia Motors	0	5	6	0	2.55
Destination XL Group	1	0	1	0	2.00

Lithia Motors presently has a consensus price target of $436.33, indicating a potential upside of 21.58%. Destination XL Group has a consensus price target of $1.25, indicating a potential upside of 95.31%. Given Destination XL Group’s higher probable upside, analysts plainly believe Destination XL Group is more favorable than Lithia Motors.

Risk and Volatility

Lithia Motors has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Destination XL Group has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500.

Insider and Institutional Ownership

73.5% of Destination XL Group shares are owned by institutional investors. 1.1% of Lithia Motors shares are owned by insiders. Comparatively, 14.3% of Destination XL Group shares are owned by 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.

Earnings and Valuation

This table compares Lithia Motors and Destination XL Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lithia Motors	$37.63 billion	0.21	$819.60 million	$30.15	11.90
Destination XL Group	$435.02 million	0.08	-$35.91 million	($0.69)	-0.93

Lithia Motors has higher revenue and earnings than Destination XL Group. Destination XL Group is trading at a lower price-to-earnings ratio than Lithia Motors, indicating that it is currently the more affordable of the two stocks.

Summary

Lithia Motors beats Destination XL Group on 10 of the 14 factors compared between the two stocks.

About Lithia Motors

Lithia Motors, Inc. operates as an automotive retailer worldwide. It operates in two segments, Vehicle Operations and Financing Operations. The company’s Vehicle Operations segment sells new and used vehicles; provides parts, repair, and maintenance services; vehicle finance; and insurance products. Its Financing Operations segment provides financing to customers buying and leasing retail vehicles. The company sells its products and services through the Driveway and Greencars brand names through a network of locations, e-commerce platforms, and captive finance solutions. Lithia Motors, Inc. was founded in 1946 and is headquartered in Medford, Oregon.

About Destination XL Group

Destination XL Group, Inc., together with its subsidiaries, operates as a specialty retailer of big and tall men’s clothing and shoes in the United States. The company’s stores offer sportswear and dresswear; fashion-neutral items, including jeans, casual pants, T-shirts, polo shirts, dress shirts, and suit separates; and casual clothing. It also provides vintage-screen T-shirts and wovens under various private labels. The company offers its products under the trade names of Destination XL, DXL, DXL Men’s Apparel, DXL outlets, Casual Male XL, and Casual Male XL outlets. The company was formerly known as Casual Male Retail Group, Inc. and changed its name to Destination XL Group, Inc. in February 2013. Destination XL Group, Inc. was incorporated in 1976 and is headquartered in Canton, Massachusetts.