Lands’ End (NASDAQ: LE) and Sequential Brands Group (NASDAQ:SQBG) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, profitability, risk, institutional ownership, analyst recommendations and dividends.

Profitability

This table compares Lands’ End and Sequential Brands Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lands’ End -8.48% -0.73% -0.19%
Sequential Brands Group -14.35% 2.24% 0.85%

Analyst Ratings

This is a summary of current ratings for Lands’ End and Sequential Brands Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lands’ End 0 1 0 0 2.00
Sequential Brands Group 0 4 3 0 2.43

Lands’ End currently has a consensus price target of C$15.00, indicating a potential upside of 15.83%. Sequential Brands Group has a consensus price target of $7.08, indicating a potential upside of 405.95%. Given Sequential Brands Group’s stronger consensus rating and higher probable upside, analysts plainly believe Sequential Brands Group is more favorable than Lands’ End.

Institutional & Insider Ownership

62.3% of Lands’ End shares are owned by institutional investors. Comparatively, 51.6% of Sequential Brands Group shares are owned by institutional investors. 0.5% of Lands’ End shares are owned by insiders. Comparatively, 27.3% of Sequential Brands Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Lands’ End and Sequential Brands Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Lands’ End $1.34 billion 0.31 -$109.78 million C($3.55) -3.65
Sequential Brands Group $155.53 million 0.57 -$820,000.00 ($0.38) -3.68

Sequential Brands Group has higher revenue, but lower earnings than Lands’ End. Sequential Brands Group is trading at a lower price-to-earnings ratio than Lands’ End, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Lands’ End has a beta of 0.26, suggesting that its stock price is 74% less volatile than the S&P 500. Comparatively, Sequential Brands Group has a beta of 0.48, suggesting that its stock price is 52% less volatile than the S&P 500.

Summary

Sequential Brands Group beats Lands’ End on 10 of the 13 factors compared between the two stocks.

Lands’ End Company Profile

Lands’ End, Inc. (Lands’ End) is a multi-channel retailer of casual clothing, accessories and footwear, as well as home products. The Company operates through two segments: Direct and Retail. The Company offers products through catalogs, online at www.landsend.com. The Direct segment sells products through the Company’s e-commerce Websites, international Websites and direct mail catalogs. The Retail segment sells products and services through Lands’ End Shops at Sears across the United States, the Company’s standalone Lands’ End Inlet stores and international shop-in-shops. The Company’s product categories include Apparel and Non-apparel. The Non-apparel category offers accessories, footwear and home goods. The Company provides embroidery, monogramming, gift wrapping, shipping and other services. In addition, the Company offers sheets and pillowcases, duvet covers and comforters, blankets and throws, mattress pads, towels, rugs and mats, school uniforms and shower curtains.

Sequential Brands Group Company Profile

Sequential Brands Group, Inc. owns a portfolio of consumer brands in the fashion, home, athletic and lifestyle categories. The Company’s portfolio of consumer brands includes Martha Stewart, Emeril Lagasse, Jessica Simpson, Joe’s Jeans, William Rast, Ellen Tracy, Revo, AND1 and Avia. The Company’s brands are licensed for a range of product categories, including apparel, footwear, eyewear, fashion accessories and home goods. The Company licenses brands to both wholesale and direct-to-retail licensees. The Company licenses the Martha Stewart brand to various licensees, including retailers, such as Macy’s, The Home Depot, PetSmart and Staples. The Jessica Simpson Collection is a signature lifestyle concept designed in collaboration with Jessica Simpson, which offers various product categories, including footwear, apparel, fragrance, fashion accessories, maternity apparel, girls clothing and a home line. The Avia brand offers running and activewear products.

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