Contrasting Designer Brands (DBI) & Boot Barn (BOOT)

Designer Brands (NYSE:DBI) and Boot Barn (NYSE:BOOT) are both small-cap retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, profitability, dividends and risk.

Profitability

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

Net Margins Return on Equity Return on Assets
Designer Brands -0.64% 14.76% 9.03%
Boot Barn 4.93% 13.54% 5.14%

Dividends

Designer Brands pays an annual dividend of $1.00 per share and has a dividend yield of 4.3%. Boot Barn does not pay a dividend. Designer Brands pays out 60.2% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Designer Brands and Boot Barn’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Designer Brands $3.18 billion 0.58 -$20.47 million $1.66 13.93
Boot Barn $677.95 million 1.31 $28.87 million $0.70 44.63

Boot Barn has lower revenue, but higher earnings than Designer Brands. Designer Brands is trading at a lower price-to-earnings ratio than Boot Barn, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Designer Brands has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, Boot Barn has a beta of 2.31, suggesting that its share price is 131% more volatile than the S&P 500.

Insider & Institutional Ownership

84.6% of Designer Brands shares are held by institutional investors. 16.7% of Designer Brands shares are held by insiders. Comparatively, 2.0% of Boot Barn shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Designer Brands and Boot Barn, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Designer Brands 0 0 0 1 4.00
Boot Barn 0 1 9 0 2.90

Designer Brands currently has a consensus price target of $23.00, suggesting a potential downside of 0.52%. Boot Barn has a consensus price target of $27.38, suggesting a potential downside of 12.37%. Given Designer Brands’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Designer Brands is more favorable than Boot Barn.

Summary

Designer Brands beats Boot Barn on 10 of the 17 factors compared between the two stocks.

About Designer Brands

Designer Brands Inc. designs, producers, and retails footwear and accessories for women, men, and kids primarily in North America. It operates through three segments: The U.S. Retail, the Canada Retail, and the Brand Portfolio. The company also provides handbags, hosiery, jewelry, and other accessories. The company offers its products under the Vince Camuto, Louise et Cie, Sole Society, CC Corso Como, Enzo Angiolini, Jessica Simpson, Lucky, and other brands. It operates vincecamuto.com and solesociety.com e-commerce sites. As of March 21, 2019, it operated a portfolio of retail stores in approximately 1,000 locations. Designer Brands Inc. is based in Columbus, Ohio.

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. As of August 7, 2018, it operated 232 stores in 31 states. Boot Barn Holdings, Inc. 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.

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