Comparing Guess? (GES) and Genesco (GCO)

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

Dividends

Guess? pays an annual dividend of $0.90 per share and has a dividend yield of 7.0%. Genesco does not pay a dividend. Guess? pays out 290.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Genesco has increased its dividend for 3 consecutive years.

Risk & Volatility

Genesco has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500. Comparatively, Guess? has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Genesco $2.86 billion 0.16 $199.22 million $4.46 5.36
Guess? $2.22 billion 0.48 $130.81 million $0.31 41.29

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

Institutional and Insider Ownership

80.3% of Guess? shares are owned by institutional investors. 3.3% of Genesco shares are owned by company insiders. Comparatively, 29.6% of Guess? shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Genesco and Guess?’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Genesco 3.07% 8.41% 4.94%
Guess? 1.20% 3.67% 2.36%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Genesco and Guess?, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genesco 0 3 4 0 2.57
Guess? 2 5 2 0 2.00

Genesco presently has a consensus price target of $45.17, indicating a potential upside of 88.98%. Guess? has a consensus price target of $12.55, indicating a potential downside of 1.99%. Given Genesco’s stronger consensus rating and higher possible upside, research analysts clearly believe Genesco is more favorable than Guess?.

Summary

Genesco beats Guess? on 12 of the 17 factors compared between the two stocks.

Genesco Company Profile

Genesco Inc. is a retailer and wholesaler of footwear, apparel and accessories. The Company operates in five segments: Journeys Group, Schuh Group, Lids Sports Group, Johnston & Murphy Group and Licensed Brands. It relies on independent third-party manufacturers for production of its footwear products sold at wholesale. It sources footwear and accessory products from foreign manufacturers located in Bangladesh, Brazil, Cambodia, Canada, China, Dominican Republic, El Salvador, France, Germany, Hong Kong, India, Indonesia, Italy, Mexico, the Netherlands, Portugal, Peru, Romania, Taiwan and Vietnam. As of January 28, 2017, it operated 2,794 retail footwear, headwear and sports apparel and accessory stores and leased departments located primarily throughout the United States and in Puerto Rico, including 147 headwear and sports apparel and accessory stores and 87 footwear stores in Canada and 128 footwear stores in the United Kingdom, the Republic of Ireland and Germany.

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.

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