Ascena Retail Group (NASDAQ: ASNA) and Destination XL Group (NASDAQ:DXLG) are both small-cap retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitabiliy, earnings, institutional ownership, valuation and dividends.
Volatility & Risk
Ascena Retail Group has a beta of 1.9, meaning that its stock price is 90% more volatile than the S&P 500. Comparatively, Destination XL Group has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500.
Earnings and Valuation
This table compares Ascena Retail Group and Destination XL Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ascena Retail Group||$6.80 billion||0.06||$581.10 million||($5.33)||-0.41|
|Destination XL Group||$450.02 million||0.27||$25.72 million||($0.17)||-14.71|
Ascena Retail Group has higher revenue and earnings than Destination XL Group. Destination XL Group is trading at a lower price-to-earnings ratio than Ascena Retail Group, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
98.1% of Ascena Retail Group shares are held by institutional investors. Comparatively, 80.3% of Destination XL Group shares are held by institutional investors. 8.6% of Ascena Retail Group shares are held by company insiders. Comparatively, 30.4% of Destination XL Group shares are held 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.
This is a breakdown of recent ratings and target prices for Ascena Retail Group and Destination XL Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ascena Retail Group||1||7||0||0||1.88|
|Destination XL Group||0||0||2||0||3.00|
Ascena Retail Group currently has a consensus price target of $4.50, suggesting a potential upside of 106.42%. Destination XL Group has a consensus price target of $6.50, suggesting a potential upside of 160.00%. Given Destination XL Group’s stronger consensus rating and higher probable upside, analysts plainly believe Destination XL Group is more favorable than Ascena Retail Group.
This table compares Ascena Retail Group and Destination XL Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ascena Retail Group||-15.25%||2.96%||0.94%|
|Destination XL Group||-1.90%||-5.81%||-1.83%|
Destination XL Group beats Ascena Retail Group on 7 of the 13 factors compared between the two stocks.
About Ascena Retail Group
Ascena Retail Group, Inc. is a specialty retailer of apparel for women and tween girls. The Company operates through six segments: ANN, Justice, Lane Bryant, maurices, dressbarn and Catherines. The ANN segment offers feminine classics and fashion choices, sold primarily under the Ann Taylor and LOFT brands. The Justice segment offers apparel to girls who are aged 6 to 12. The Lane Bryant segment offers apparel to female customers in plus-sizes 14-28. The maurices segment offers women’s casual clothing, career wear, dressy apparel, active wear and accessories. The dressbarn segment consists of the specialty retail, outlet and e-commerce operations of the dressbarn brand. The Catherines segment offers classic apparel and accessories to female customers for wear-to-work and casual lifestyles. As of July 30, 2016, the Company operated approximately 4,900 stores in 49 United States’ states, the District of Columbia, Canada and Puerto Rico.
About Destination XL Group
Destination XL Group, Inc. is a specialty retailer of men’s apparel with retail and direct operations in the United States and London, England. The Company operates through the Big & Tall Men’s Apparel segment. The Company operates under the trade names of Destination XL, DXL, Casual Male XL, Casual Male XL outlets, DXL outlets, Rochester Clothing, ShoesXL and LivingXL. The Company operates approximately 170 Destination XL stores, 125 Casual Male XL retail stores, 40 Casual Male XL outlet stores, nine DXL outlet stores and five Rochester Clothing stores. Its direct business includes its DestinationXL.com and bigandtall.com e-commerce sites, which support its stores, brands and product extensions. Through its multiple brands, which include both branded apparel and private-label, the Company offers a range of merchandise. The Company carries various designer brands, including Cole Haan, Allen Edmonds, Timberland, Calvin Klein, Lacoste, Donald J. Pliner and Bruno Magli.
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