Critical Review: Victoria’s Secret & Co. (NYSE:VSXY) & Stein Mart (OTCMKTS:SMRTQ)

Stein Mart (OTCMKTS:SMRTQ) and Victoria’s Secret & Co. (NYSE:VSXY) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Stein Mart and Victoria’s Secret & Co., as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stein Mart	0	0	0	0	0.00
Victoria’s Secret & Co.	0	6	6	1	2.62

Victoria’s Secret & Co. has a consensus target price of $90.70, indicating a potential upside of 3.19%. Given Victoria’s Secret & Co.’s stronger consensus rating and higher probable upside, analysts clearly believe Victoria’s Secret & Co. is more favorable than Stein Mart.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stein Mart	N/A	N/A	N/A	N/A	N/A
Victoria’s Secret & Co.	$6.76 billion	1.03	$161.00 million	$1.86	47.26

Victoria’s Secret & Co. has higher revenue and earnings than Stein Mart.

Insider & Institutional Ownership

90.3% of Victoria’s Secret & Co. shares are held by institutional investors. 39.4% of Stein Mart shares are held by company insiders. Comparatively, 0.5% of Victoria’s Secret & Co. shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Stein Mart and Victoria’s Secret & Co.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stein Mart	N/A	N/A	N/A
Victoria’s Secret & Co.	3.11%	38.03%	6.10%

Summary

Victoria’s Secret & Co. beats Stein Mart on 9 of the 10 factors compared between the two stocks.

About Stein Mart

Stein Mart, Inc., a specialty omnichannel off-price retailer, offers designer and name-brand fashion apparels, home décor merchandise, accessories, and shoes at everyday discount prices in the United States. The company's stores also provides endless aisle, a mobile technology to locate products; a SMart Rewards loyalty program; co-branded and private label credit card programs; and electronic gift cards. As of June 3, 2020, it operated 281 stores in 30 states. The company also sells its products through an online retail selling site. Stein Mart, Inc. was founded in 1908 and is headquartered in Jacksonville, Florida. On August 12, 2020, Stein Mart, Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Middle District of Florida.

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.