Guess? (NYSE: GES) and Express (NYSE:EXPR) are both small-cap cyclical consumer goods & services companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Guess? and Express, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Guess? 1 5 3 0 2.22
Express 0 9 0 0 2.00

Guess? currently has a consensus target price of $14.74, indicating a potential downside of 11.27%. Express has a consensus target price of $9.05, indicating a potential upside of 20.83%. Given Express’ higher possible upside, analysts clearly believe Express is more favorable than Guess?.

Dividends

Guess? pays an annual dividend of $0.90 per share and has a dividend yield of 5.4%. Express does not pay a dividend. Guess? pays out -2,250.0% of its earnings in the form of a dividend. Guess? has raised its dividend for 4 consecutive years.

Insider & Institutional Ownership

82.4% of Guess? shares are owned by institutional investors. Comparatively, 99.1% of Express shares are owned by institutional investors. 29.6% of Guess? shares are owned by company insiders. Comparatively, 2.6% of Express shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Guess? -0.30% -1.30% -0.43%
Express 1.26% 3.97% 2.08%

Volatility & Risk

Guess? has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500. Comparatively, Express has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500.

Earnings and Valuation

This table compares Guess? and Express’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Guess? $2.21 billion 0.62 $22.76 million ($0.04) -415.25
Express $2.19 billion 0.27 $57.41 million $0.16 46.81

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

Summary

Express beats Guess? on 9 of the 17 factors compared between the two stocks.

About Guess?

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.

About Express

Express, Inc. is a specialty apparel and accessories retailer offering both women’s and men’s merchandise. The Company targets women and men between 20 and 30 years old. It offers an assortment of fashionable apparel and accessories to address fashion needs across multiple aspects of lifestyles, including work, casual, jeanswear and going-out occasions. It is engaged in the operation of its brick-and-mortar retail and outlet stores, e-commerce operations and franchise operations. It sells its products through its e-commerce Website, www.express.com and its mobile application, and has franchise agreements with franchisees that operate Express locations in Latin America. It operated 656 stores across the United States, in Canada and in Puerto Rico, including 104 factory outlet stores, as of January 28, 2017. Its products are created by its in-house design team. Its portfolio of apparel products includes brands, such as Portofino shirt, Editor pant and 1MX shirt.

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