Analyzing Designer Brands (DBI) and Genesco (GCO)

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Designer Brands (NYSE:DBI) and Genesco (NYSE:GCO) are both small-cap retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, risk, profitability, valuation, dividends and earnings.

Risk and Volatility

Designer Brands has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500. Comparatively, Genesco has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500.

Valuation & Earnings

This table compares Designer Brands and Genesco’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Designer Brands $3.18 billion 0.55 -$20.47 million $1.66 13.55
Genesco $2.19 billion 0.37 -$51.93 million $3.28 13.53

Designer Brands has higher revenue and earnings than Genesco. Genesco is trading at a lower price-to-earnings ratio than Designer Brands, indicating that it is currently the more affordable of the two stocks.

Dividends

Designer Brands pays an annual dividend of $1.00 per share and has a dividend yield of 4.4%. Genesco does not pay a dividend. Designer Brands pays out 60.2% of its earnings in the form of a dividend.

Profitability

This table compares Designer Brands and Genesco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Designer Brands -0.64% 14.76% 9.03%
Genesco -1.93% 7.52% 4.58%

Institutional & Insider Ownership

84.7% of Designer Brands shares are held by institutional investors. 17.4% of Designer Brands shares are held by company insiders. Comparatively, 4.3% of Genesco shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Designer Brands and Genesco, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Designer Brands 0 0 0 1 4.00
Genesco 0 5 0 0 2.00

Designer Brands presently has a consensus target price of $23.00, suggesting a potential upside of 2.22%. Genesco has a consensus target price of $42.00, suggesting a potential downside of 5.38%. Given Designer Brands’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Designer Brands is more favorable than Genesco.

Summary

Designer Brands beats Genesco on 14 of the 16 factors compared between the two stocks.

Designer Brands Company Profile

Designer Brands Inc. designs, producers, and retails footwear and accessories for women, men, and kids primarily in North America. It operates through three segments: The U.S. Retail, the Canada Retail, and the Brand Portfolio. The company also provides handbags, hosiery, jewelry, and other accessories. The company offers its products under the Vince Camuto, Louise et Cie, Sole Society, CC Corso Como, Enzo Angiolini, Jessica Simpson, Lucky, and other brands. It operates vincecamuto.com and solesociety.com e-commerce sites. As of March 21, 2019, it operated a portfolio of retail stores in approximately 1,000 locations. Designer Brands Inc. is based in Columbus, Ohio.

Genesco Company Profile

Genesco Inc. retails and wholesales footwear, apparel, and accessories. The company operates in five segments: Journeys Group, Schuh Group, Lids Sports Group, Johnston & Murphy Group, and Licensed Brands. The Journeys Group segment offers footwear and accessories through the Journeys, Journeys Kidz, Shi by Journeys, and Little Burgundy retail chains, as well as through e-commerce and catalogs for young men, women, and children. The Schuh Group segment operates Schuh retail footwear stores that offer casual and athletic footwear for men and women, as well as sells footwear through e-commerce. The Lids Sports Group segment operates headwear and accessory stores under the Lids name; Lids Locker Room and Lids Clubhouse stores, which offers headwear, apparel, accessories, and novelties from an assortment of college and professional teams; and Locker Room by Lids leased departments in Macy's department stores that sell headwear, apparel, accessories, and novelties from an assortment of college and professional teams, as well as sells through macys.com. The Johnston & Murphy Group segment is involved in retail, e-commerce, and catalog operations; and wholesale distribution of footwear, apparel, and accessories primarily for men. It also offers footwear and leather accessories under the Trask brand through retailers and department stores, an e-commerce Website, and catalog. The Licensed Brands segment markets casual footwear under the Dockers brand for men. As of March 15, 2018, the company operated approximately 2,675 retail stores and leased departments in the United States, Canada, the United Kingdom, the Republic of Ireland, and Germany. Its Internet websites include journeys.com, journeyskidz.com, journeys.ca, shibyjourneys.com, schuh.co.uk, littleburgundyshoes.com, johnstonmurphy.com, lids.com, lids.ca, lidslockerroom.com, lidsclubhouse.com, trask.com, and dockersshoes.com. Genesco Inc. was founded in 1924 and is headquartered in Nashville, Tennessee.

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