Xcel Brands (NASDAQ: XELB) and Citi Trends (NASDAQ:CTRN) are both small-cap retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, risk, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Insider & Institutional Ownership

17.3% of Xcel Brands shares are held by institutional investors. Comparatively, 90.8% of Citi Trends shares are held by institutional investors. 59.9% of Xcel Brands shares are held by insiders. Comparatively, 4.6% of Citi Trends shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Xcel Brands and Citi Trends, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xcel Brands 0 0 1 0 3.00
Citi Trends 0 0 0 0 N/A

Xcel Brands presently has a consensus price target of $4.50, suggesting a potential upside of 23.29%. Given Xcel Brands’ higher probable upside, analysts plainly believe Xcel Brands is more favorable than Citi Trends.

Valuation & Earnings

This table compares Xcel Brands and Citi Trends’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Xcel Brands $32.08 million 1.81 $4.00 million $0.14 26.07
Citi Trends $712.38 million 0.41 $35.16 million $0.91 22.57

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

Volatility & Risk

Xcel Brands has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500. Comparatively, Citi Trends has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500.

Dividends

Citi Trends pays an annual dividend of $0.32 per share and has a dividend yield of 1.6%. Xcel Brands does not pay a dividend. Citi Trends pays out 35.2% of its earnings in the form of a dividend.

Profitability

This table compares Xcel Brands and Citi Trends’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Xcel Brands 8.38% 0.99% 0.70%
Citi Trends 1.88% 6.93% 4.69%

Summary

Xcel Brands beats Citi Trends on 8 of the 15 factors compared between the two stocks.

Xcel Brands Company Profile

Xcel Brands, Inc. is a brand development and media company. The Company is engaged in the design, production, licensing, marketing, and direct to consumer sales of branded apparel, footwear, accessories, jewelry, home goods, and other consumer products, and the acquisition of consumer lifestyle brands. The Company’s brand portfolio consists of the Isaac Mizrahi, Judith Ripka, H Halston, C Wonder and Highline Collective brands. The Company also manages and designs the Liz Claiborne New York brand (LCNY Brand). Isaac Mizrahi has over 150 different product categories, including sportswear, footwear, handbags, watches, eyewear, fragrance, tech accessories, intimates, bridal gowns and accessories, pet products, home and other merchandise. The Company’s Judith Ripka is a luxury jewelry brand. Wonder brand offers women’s clothing, footwear, jewelry and accessories; housewares, and home decor and gifts. The Liz Claiborne New York includes women’s apparel, footwear, outerwear and accessories.

Citi Trends Company Profile

Citi Trends, Inc. is a retailer of urban fashion apparel and accessories. The Company’s segment is retail operations. The Company operates approximately 520 stores in both urban and rural markets in over 30 states. The Company offers products under its brands, such as Citi Steps and Red Ape. The Company’s merchandise includes apparel, accessories and home. Within apparel, the Company offers fashion sportswear for men, women and children, including offerings for newborns, infants, toddlers, boys and girls. Accessories include handbags, jewelry, footwear, belts, intimate apparel, scrubs and sleepwear. The Company’s home merchandise includes decorative home product, functional home product, beauty, books, toys and electronic accessories. The Company sources its merchandise from approximately 1,700 vendors, consisting of domestic manufacturers and importers.

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