Critical Comparison: Victoria’s Secret & Co. (NYSE:VSCO) vs. Boot Barn (NYSE:BOOT)

Victoria’s Secret & Co. (NYSE:VSCO) and Boot Barn (NYSE:BOOT) are both mid-cap retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, risk, earnings and dividends.

Valuation and Earnings

This table compares Victoria’s Secret & Co. and Boot Barn”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Victoria’s Secret & Co.	$6.39 billion	0.70	$165.00 million	$2.05	27.18
Boot Barn	$1.91 billion	2.85	$180.94 million	$6.76	26.43

Boot Barn has lower revenue, but higher earnings than Victoria’s Secret & Co.. Boot Barn is trading at a lower price-to-earnings ratio than Victoria’s Secret & Co., indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

90.3% of Victoria’s Secret & Co. shares are held by institutional investors. 0.5% of Victoria’s Secret & Co. shares are held by insiders. Comparatively, 0.7% of Boot Barn shares are held by 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 Victoria’s Secret & Co. and Boot Barn’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Victoria’s Secret & Co.	2.67%	33.47%	4.82%
Boot Barn	10.05%	18.11%	9.94%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Victoria’s Secret & Co. and Boot Barn, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Victoria’s Secret & Co.	1	5	7	1	2.57
Boot Barn	0	4	11	0	2.73

Victoria’s Secret & Co. presently has a consensus target price of $54.60, suggesting a potential downside of 2.00%. Boot Barn has a consensus target price of $206.08, suggesting a potential upside of 15.32%. Given Boot Barn’s stronger consensus rating and higher probable upside, analysts clearly believe Boot Barn is more favorable than Victoria’s Secret & Co..

Volatility & Risk

Victoria’s Secret & Co. has a beta of 2.21, suggesting that its share price is 121% more volatile than the S&P 500. Comparatively, Boot Barn has a beta of 1.61, suggesting that its share price is 61% more volatile than the S&P 500.

Summary

Boot Barn beats Victoria’s Secret & Co. on 9 of the 15 factors compared between the two stocks.

About Victoria’s Secret & Co.

Victoria’s Secret & Co. operates as a lingerie, clothing and beauty retailer. It offers bras, panties, lingerie, pajamas, sleep, sport and swim apparel, and beauty products. The company was founded in 1963 and is headquartered in Reynoldsburg, OH.

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. The company 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.