Stage Stores (NYSE: SSI) and Ascena Retail Group (NASDAQ:ASNA) are both small-cap retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Risk and Volatility

Stage Stores has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, Ascena Retail Group has a beta of 1.91, suggesting that its stock price is 91% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Stage Stores and Ascena Retail Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stage Stores 1 2 0 0 1.67
Ascena Retail Group 1 7 0 0 1.88

Stage Stores currently has a consensus target price of $2.00, suggesting a potential upside of 12.36%. Ascena Retail Group has a consensus target price of $3.83, suggesting a potential upside of 82.54%. Given Ascena Retail Group’s stronger consensus rating and higher probable upside, analysts clearly believe Ascena Retail Group is more favorable than Stage Stores.

Earnings and Valuation

This table compares Stage Stores and Ascena Retail Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Stage Stores $1.46 billion 0.03 $28.34 million ($1.76) -1.01
Ascena Retail Group $6.80 billion 0.06 $581.10 million ($5.33) -0.39

Ascena Retail Group has higher revenue and earnings than Stage Stores. Stage Stores is trading at a lower price-to-earnings ratio than Ascena Retail Group, indicating that it is currently the more affordable of the two stocks.

Dividends

Stage Stores pays an annual dividend of $0.20 per share and has a dividend yield of 11.2%. Ascena Retail Group does not pay a dividend. Stage Stores pays out -11.4% of its earnings in the form of a dividend. Stage Stores has increased its dividend for 7 consecutive years.

Insider and Institutional Ownership

62.5% of Stage Stores shares are owned by institutional investors. Comparatively, 95.7% of Ascena Retail Group shares are owned by institutional investors. 7.4% of Stage Stores shares are owned by company insiders. Comparatively, 8.6% of Ascena Retail Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Stage Stores and Ascena Retail Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stage Stores -3.27% -7.78% -3.29%
Ascena Retail Group -15.25% 2.96% 0.94%

Summary

Ascena Retail Group beats Stage Stores on 10 of the 15 factors compared between the two stocks.

About Stage Stores

Stage Stores, Inc. operates specialty department stores mainly in small and mid-sized towns and communities. The Company’s department stores offer a range of brand name and private label apparel, accessories, cosmetics, footwear and home goods. The Company operates approximately 830 specialty department stores in over 40 states under the BEALLS, GOODY’S, PALAIS ROYAL, PEEBLES and STAGE nameplates and a direct-to-consumer business. The Company’s direct-to-consumer business consists of its e-commerce Website and Send program. The Company’s e-commerce Website includes a range of merchandise categories found in its stores, as well as other product offerings. The Company’s in-store Send program allows customers to have merchandise shipped directly to their homes if the preferred size or color is not available in their local store. The Company’s private label portfolio brands are developed and sourced through agreements with third-party vendors.

About Ascena Retail Group

Ascena Retail Group, Inc. is a specialty retailer of apparel for women and tween girls. The Company operates through six segments: ANN, Justice, Lane Bryant, maurices, dressbarn and Catherines. The ANN segment offers feminine classics and fashion choices, sold primarily under the Ann Taylor and LOFT brands. The Justice segment offers apparel to girls who are aged 6 to 12. The Lane Bryant segment offers apparel to female customers in plus-sizes 14-28. The maurices segment offers women’s casual clothing, career wear, dressy apparel, active wear and accessories. The dressbarn segment consists of the specialty retail, outlet and e-commerce operations of the dressbarn brand. The Catherines segment offers classic apparel and accessories to female customers for wear-to-work and casual lifestyles. As of July 30, 2016, the Company operated approximately 4,900 stores in 49 United States’ states, the District of Columbia, Canada and Puerto Rico.

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