Stein Mart (SMRT) versus Genesco (GCO) Financial Analysis

Stein Mart (NASDAQ: SMRT) and Genesco (NYSE:GCO) are both small-cap retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.

Analyst Recommendations

This is a summary of current recommendations and price targets for Stein Mart and Genesco, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stein Mart 0 3 0 0 2.00
Genesco 0 4 3 0 2.43

Stein Mart presently has a consensus price target of $7.50, suggesting a potential upside of 450.06%. Genesco has a consensus price target of $32.67, suggesting a potential upside of 30.02%. Given Stein Mart’s higher possible upside, research analysts plainly believe Stein Mart is more favorable than Genesco.

Earnings & Valuation

This table compares Stein Mart and Genesco’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Stein Mart $1.33 billion 0.05 $326,000.00 ($0.55) -2.48
Genesco $2.85 billion 0.18 $184.95 million $3.53 7.12

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

Profitability

This table compares Stein Mart and Genesco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stein Mart -1.89% -34.59% -4.43%
Genesco 2.43% 7.36% 4.34%

Volatility & Risk

Stein Mart has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, Genesco has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500.

Dividends

Stein Mart pays an annual dividend of $0.22 per share and has a dividend yield of 16.1%. Genesco does not pay a dividend. Stein Mart pays out -40.0% of its earnings in the form of a dividend.

Insider & Institutional Ownership

33.0% of Stein Mart shares are held by institutional investors. Comparatively, 95.9% of Genesco shares are held by institutional investors. 34.7% of Stein Mart shares are held by insiders. Comparatively, 3.3% of Genesco shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Genesco beats Stein Mart on 11 of the 15 factors compared between the two stocks.

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.

About Genesco

Genesco Inc. is a retailer and wholesaler of footwear, apparel and accessories. The Company operates in five segments: Journeys Group, Schuh Group, Lids Sports Group, Johnston & Murphy Group and Licensed Brands. It relies on independent third-party manufacturers for production of its footwear products sold at wholesale. It sources footwear and accessory products from foreign manufacturers located in Bangladesh, Brazil, Cambodia, Canada, China, Dominican Republic, El Salvador, France, Germany, Hong Kong, India, Indonesia, Italy, Mexico, the Netherlands, Portugal, Peru, Romania, Taiwan and Vietnam. As of January 28, 2017, it operated 2,794 retail footwear, headwear and sports apparel and accessory stores and leased departments located primarily throughout the United States and in Puerto Rico, including 147 headwear and sports apparel and accessory stores and 87 footwear stores in Canada and 128 footwear stores in the United Kingdom, the Republic of Ireland and Germany.

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