Foot Locker (NYSE: FL) and L Brands (NYSE:LTD) are both retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitabiliy, risk, analyst recommendations, dividends, institutional ownership and valuation.

Profitability

This table compares Foot Locker and L Brands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Foot Locker 8.39% 23.87% 16.90%
L Brands 3.86% N/A 4.70%

Valuation & Earnings

This table compares Foot Locker and L Brands’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Foot Locker $7.78 billion 0.81 $1.13 billion $4.89 9.82
L Brands N/A N/A N/A N/A N/A

Foot Locker has higher revenue and earnings than L Brands.

Dividends

Foot Locker pays an annual dividend of $1.24 per share and has a dividend yield of 2.6%. L Brands does not pay a dividend. Foot Locker pays out 25.4% of its earnings in the form of a dividend. L Brands has raised its dividend for 6 consecutive years.

Institutional & Insider Ownership

96.5% of Foot Locker shares are owned by institutional investors. 2.9% of Foot Locker shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Foot Locker and L Brands, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Foot Locker 0 6 16 1 2.78
L Brands 0 0 0 0 N/A

Foot Locker currently has a consensus target price of $73.99, suggesting a potential upside of 54.06%. Given Foot Locker’s higher possible upside, equities research analysts plainly believe Foot Locker is more favorable than L Brands.

Summary

Foot Locker beats L Brands on 10 of the 12 factors compared between the two stocks.

Foot Locker Company Profile

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).

L Brands Company Profile

L Brands, Inc. operates specialty retail business. The Company is focused on women’s intimate and other apparel, personal care, beauty and home fragrance categories. Its segments include Victoria’s Secret, Bath & Body Works, and Victoria’s Secret and Bath & Body Works International. It sells its merchandise through company-owned specialty retail stores in the United States, Canada, the United Kingdom and Greater China, which are mall-based; through Websites, and through international franchise, license and wholesale partners. It operates in the retail brands, which include Victoria’s Secret, PINK, Bath & Body Works and La Senza. La Senza is a specialty retailer of women’s intimate apparel. It sells its La Senza products at over 120 La Senza stores in Canada. Henri Bendel sells handbags, jewelry and other accessory products through New York and 28 other stores. Mast Global is a merchandise sourcing and production function serving the Company and its international partners.

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