Analyzing Five Below (NASDAQ:FIVE) & Destination XL Group (NASDAQ:DXLG)

Five Below (NASDAQ:FIVE) and Destination XL Group (NASDAQ:DXLG) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, analyst recommendations and institutional ownership.

Earnings & Valuation

This table compares Five Below and Destination XL Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Five Below	$4.76 billion	2.89	$358.64 million	$11.14	22.45
Destination XL Group	$428.87 million	0.06	-$35.91 million	($0.69)	-0.67

Five Below has higher revenue and earnings than Destination XL Group. Destination XL Group is trading at a lower price-to-earnings ratio than Five Below, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Five Below and Destination XL Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Five Below	0	13	19	0	2.59
Destination XL Group	1	0	1	0	2.00

Five Below presently has a consensus target price of $301.90, suggesting a potential upside of 20.70%. Destination XL Group has a consensus target price of $1.25, suggesting a potential upside of 171.74%. Given Destination XL Group’s higher probable upside, analysts clearly believe Destination XL Group is more favorable than Five Below.

Profitability

This table compares Five Below and Destination XL Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Five Below	11.65%	22.13%	9.86%
Destination XL Group	-8.77%	-9.05%	-2.75%

Institutional & Insider Ownership

73.5% of Destination XL Group shares are held by institutional investors. 1.0% of Five Below shares are held by insiders. Comparatively, 14.3% of Destination XL Group 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.

Risk & Volatility

Five Below has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, Destination XL Group has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500.

Summary

Five Below beats Destination XL Group on 10 of the 14 factors compared between the two stocks.

About Five Below

Five Below, Inc. is a U.S. discount retailer offering a changing assortment of value-priced products for teens, tweens, and families. Its merchandise spans toys and games, technology accessories, sports and recreation, fashion and accessories, home goods, party supplies, seasonal items, and candy. The company was founded in 2002 by David Schlessinger and Tom Vellios, and opened its first store in Wayne, Pennsylvania. While its name reflects its original focus on products priced at $5 or less, Five Below has expanded its assortment to include higher-priced items through its Five Beyond offering.

About Destination XL Group

Destination XL Group, Inc. is a specialty retailer focused on clothing and accessories for big and tall men. The company operates under the Destination XL and DXL brands, offering casualwear, business attire, activewear, footwear, underwear, and accessories in extended sizes and proportions. Destination XL serves customers through a combination of retail stores, e-commerce operations, and other direct-to-consumer channels. Its merchandise includes products from national brands as well as private-label offerings designed specifically for the big and tall market.