Guess? (NYSE: GES) and Stage Stores (NYSE:SSI) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, dividends, earnings and risk.

Volatility and Risk

Guess? has a beta of 0.41, indicating that its stock price is 59% less volatile than the S&P 500. Comparatively, Stage Stores has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Dividends

Guess? pays an annual dividend of $0.90 per share and has a dividend yield of 5.6%. Stage Stores pays an annual dividend of $0.20 per share and has a dividend yield of 10.5%. Guess? pays out 818.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Stage Stores pays out -11.4% of its earnings in the form of a dividend. Guess? has raised its dividend for 3 consecutive years and Stage Stores has raised its dividend for 7 consecutive years. Stage Stores is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for Guess? and Stage Stores, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Guess? 1 5 3 0 2.22
Stage Stores 1 2 0 0 1.67

Guess? currently has a consensus price target of $13.74, indicating a potential downside of 14.45%. Stage Stores has a consensus price target of $2.00, indicating a potential upside of 4.71%. Given Stage Stores’ higher possible upside, analysts clearly believe Stage Stores is more favorable than Guess?.

Profitability

This table compares Guess? and Stage Stores’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Guess? 0.43% 4.14% 2.62%
Stage Stores -3.27% -7.78% -3.29%

Institutional & Insider Ownership

79.5% of Guess? shares are held by institutional investors. Comparatively, 62.2% of Stage Stores shares are held by institutional investors. 29.6% of Guess? shares are held by company insiders. Comparatively, 7.4% of Stage Stores shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Guess? and Stage Stores’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Guess? $2.25 billion 0.59 $137.42 million $0.11 146.00
Stage Stores $1.46 billion 0.04 $29.42 million ($1.76) -1.09

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

Summary

Guess? beats Stage Stores on 11 of the 16 factors compared between the two stocks.

Guess? Company Profile

Guess?, Inc. designs, markets, distributes and licenses a lifestyle collections of apparel and accessories for men, women and children. The Company operates through five segments: Americas Retail, Europe, Asia, Americas Wholesale and Licensing. The Americas Retail segment includes the Company’s retail and e-commerce operations in North and Central America and its retail operations in South America. The Europe segment includes the Company’s retail, e-commerce and wholesale operations in Europe and the Middle East. The Asia segment includes the Company’s retail, e-commerce and wholesale operations in Asia. The Asia segment includes the Company’s retail, e-commerce and wholesale operations in Asia. The Licensing segment includes the around the world licensing operations of the Company. Its apparel is marketed under various names, including GUESS, GUESS?, GUESS U.S.A., GUESS Jeans, MARCIANO, Question Mark and Triangle Design, GUESS Kids, Baby GUESS, YES, G by GUESS and GUESS by MARCIANO.

Stage Stores Company Profile

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.

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