Foot Locker (NYSE: FL) and Tilly’s (NYSE:TLYS) are both retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Earnings & Valuation

This table compares Foot Locker and Tilly’s’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Foot Locker $7.70 billion 0.60 $1.06 billion $4.34 8.12
Tilly’s $572.08 million 0.54 $48.76 million $0.41 25.95

Foot Locker has higher revenue and earnings than Tilly’s. Foot Locker is trading at a lower price-to-earnings ratio than Tilly’s, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Foot Locker and Tilly’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Foot Locker 7.49% 21.52% 15.50%
Tilly’s 2.09% 8.73% 5.58%

Dividends

Foot Locker pays an annual dividend of $1.24 per share and has a dividend yield of 3.5%. Tilly’s does not pay a dividend. Foot Locker pays out 28.6% of its earnings in the form of a dividend. Tilly’s has increased its dividend for 6 consecutive years.

Insider and Institutional Ownership

91.3% of Foot Locker shares are held by institutional investors. Comparatively, 40.4% of Tilly’s shares are held by institutional investors. 2.9% of Foot Locker shares are held by insiders. Comparatively, 53.4% of Tilly’s shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

Foot Locker has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500. Comparatively, Tilly’s has a beta of -0.43, indicating that its stock price is 143% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Foot Locker and Tilly’s, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Foot Locker 1 12 11 0 2.42
Tilly’s 0 2 2 0 2.50

Foot Locker currently has a consensus target price of $63.95, indicating a potential upside of 81.46%. Tilly’s has a consensus target price of $11.50, indicating a potential upside of 8.08%. Given Foot Locker’s higher possible upside, equities research analysts plainly believe Foot Locker is more favorable than Tilly’s.

Summary

Foot Locker beats Tilly’s on 12 of the 17 factors compared between the two stocks.

About Foot Locker

Foot Locker, Inc. is a retailer of shoes and apparel. The Company operates through two segments: Athletic Stores and Direct-to-Customers. The Company is an athletic footwear and apparel retailer, which include businesses, such as include Foot Locker, Kids Foot Locker, Lady Foot Locker, Champs Sports, Footaction, Runners Point, Sidestep and SIX:02. The Direct-to-Customers segment is multi-branded and sells directly to customers through Internet and mobile sites and catalogs. The Direct-to-Customers segment operates the Websites for eastbay.com, final-score.com, eastbayteamsales.com and sp24.com. Additionally, this segment includes the Websites, both desktop and mobile, aligned with the brand names of its store banners (footlocker.com, ladyfootlocker.com, six02.com kidsfootlocker.com, champssports.com, footaction.com, footlocker.ca, footlocker.eu, runnerspoint.com and sidestep-shoes.com).

About Tilly’s

Tilly’s, Inc. is a destination specialty retailer of casual apparel, footwear and accessories for young men, young women, boys and girls. The Company offers an unparalleled selection of relevant brands, styles, colors, sizes and price points. The Company’s apparel merchandise includes branded, fashion and styles for tops, outerwear, bottoms and dresses. Its accessories merchandise includes backpacks, hats, sunglasses, headphones, handbags, watches, jewelry and others. The Company offers its products through stores and Website. The Company operates over 220 stores in approximately 30 states. The Company’s stores are located in malls, lifestyle centers, power centers, community centers, outlet centers and street-front locations. The Company also operates an e-commerce platform for desktop and mobile. The Company’s third-party brands include AYC, Adidas, Billabong, Converse, Hurley, Nixon, JanSport, LRG and Stance, among others.

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