Chico’s FAS (NYSE:CHS) and New York & Company, Inc. (NYSE:RTW) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.

Dividends

Chico’s FAS pays an annual dividend of $0.34 per share and has a dividend yield of 5.7%. New York & Company, Inc. does not pay a dividend. Chico’s FAS pays out 50.0% of its earnings in the form of a dividend. Chico’s FAS has raised its dividend for 8 consecutive years.

Valuation & Earnings

This table compares Chico’s FAS and New York & Company, Inc.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chico’s FAS $2.28 billion 0.33 $101.00 million $0.68 8.74
New York & Company, Inc. $926.87 million 0.22 $5.67 million $0.10 31.00

Chico’s FAS has higher revenue and earnings than New York & Company, Inc.. Chico’s FAS is trading at a lower price-to-earnings ratio than New York & Company, Inc., indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Chico’s FAS has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500. Comparatively, New York & Company, Inc. has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500.

Profitability

This table compares Chico’s FAS and New York & Company, Inc.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chico’s FAS 3.66% 10.14% 6.08%
New York & Company, Inc. 1.37% 17.23% 5.02%

Analyst Recommendations

This is a summary of recent ratings for Chico’s FAS and New York & Company, Inc., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chico’s FAS 1 7 2 0 2.10
New York & Company, Inc. 0 0 0 0 N/A

Chico’s FAS presently has a consensus target price of $7.00, suggesting a potential upside of 17.85%. Given Chico’s FAS’s higher possible upside, analysts clearly believe Chico’s FAS is more favorable than New York & Company, Inc..

Institutional & Insider Ownership

41.3% of New York & Company, Inc. shares are held by institutional investors. 2.0% of Chico’s FAS shares are held by insiders. Comparatively, 53.8% of New York & Company, Inc. shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Chico’s FAS beats New York & Company, Inc. on 10 of the 16 factors compared between the two stocks.

Chico’s FAS Company Profile

Chico's FAS, Inc. operates as an omni-channel specialty retailer of women's private branded, casual-to-dressy clothing, intimates, and complementary accessories. The company's portfolio of brands consists of the Chico's, White House Black Market (WHBM), and Soma. The Chico's brand primarily sells private branded clothing focusing on women 45 and older. The WHBM brand sells private branded clothing and accessories, such as shoes, belts, scarves, handbags, and jewelry focusing on women who are 35 years and older. The Soma brand sells designed private branded lingerie, sleepwear, loungewear, activewear, swimwear, and beauty products focusing on women who are 35 and older. As of February 3, 2018, it operated 1,460 retail stores in the United States, Puerto Rico, the U.S. Virgin Islands, and Canada. The company also sells through its Websites and catalogs. Chico's FAS, Inc. was founded in 1983 and is headquartered in Fort Myers, Florida.

New York & Company, Inc. Company Profile

RTW Retailwinds, Inc. engages in the online and retail trade of clothes. Its products include pants, dresses, jackets, knit tops, blouses, sweaters, denim, t-shirts, active wear, accessories, bags, jewelry, and shoes. The company was founded in 1918 and is headquartered in New York, NY.

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