Stage Stores (NYSE: SSI) and Tilly’s (NYSE:TLYS) are both small-cap retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.

Insider and Institutional Ownership

62.2% of Stage Stores shares are owned by institutional investors. Comparatively, 40.3% of Tilly’s shares are owned by institutional investors. 7.4% of Stage Stores shares are owned by company insiders. Comparatively, 50.1% of Tilly’s shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Stage Stores and Tilly’s’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Stage Stores $1.46 billion 0.03 $29.42 million ($1.76) -1.05
Tilly’s $572.08 million 0.63 $50.50 million $0.41 30.39

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

Risk and Volatility

Stage Stores has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500. Comparatively, Tilly’s has a beta of -0.45, suggesting that its stock price is 145% less volatile than the S&P 500.

Profitability

This table compares Stage Stores and Tilly’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stage Stores -3.27% -7.78% -3.29%
Tilly’s 2.09% 8.85% 5.50%

Dividends

Stage Stores pays an annual dividend of $0.20 per share and has a dividend yield of 10.9%. Tilly’s does not pay a dividend. Stage Stores pays out -11.4% of its earnings in the form of a dividend. Tilly’s has increased its dividend for 7 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Stage Stores and Tilly’s, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stage Stores 1 2 0 0 1.67
Tilly’s 0 2 2 0 2.50

Stage Stores currently has a consensus price target of $2.00, indicating a potential upside of 8.70%. Tilly’s has a consensus price target of $11.50, indicating a potential downside of 7.70%. Given Stage Stores’ higher possible upside, equities research analysts plainly believe Stage Stores is more favorable than Tilly’s.

Summary

Tilly’s beats Stage Stores on 10 of the 16 factors compared between the two stocks.

About Stage Stores

Stage Stores, Inc. operates specialty department stores mainly in small and mid-sized towns and communities. The Company’s department stores offer a range of brand name and private label apparel, accessories, cosmetics, footwear and home goods. The Company operates approximately 830 specialty department stores in over 40 states under the BEALLS, GOODY’S, PALAIS ROYAL, PEEBLES and STAGE nameplates and a direct-to-consumer business. The Company’s direct-to-consumer business consists of its e-commerce Website and Send program. The Company’s e-commerce Website includes a range of merchandise categories found in its stores, as well as other product offerings. The Company’s in-store Send program allows customers to have merchandise shipped directly to their homes if the preferred size or color is not available in their local store. The Company’s private label portfolio brands are developed and sourced through agreements with third-party vendors.

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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