Reviewing Guess? (GES) and Xcel Brands (NASDAQ:XELB)

Xcel Brands (NASDAQ: XELB) and Guess? (NYSE:GES) are both small-cap retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, earnings, analyst recommendations and valuation.

Profitability

This table compares Xcel Brands and Guess?’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Xcel Brands 8.38% 0.99% 0.70%
Guess? 0.43% 4.14% 2.62%

Risk and Volatility

Xcel Brands has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, Guess? has a beta of 0.41, suggesting that its stock price is 59% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Xcel Brands and Guess?, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xcel Brands 0 0 1 0 3.00
Guess? 1 5 3 0 2.22

Xcel Brands presently has a consensus price target of $4.50, suggesting a potential upside of 5.88%. Guess? has a consensus price target of $13.74, suggesting a potential downside of 12.16%. Given Xcel Brands’ stronger consensus rating and higher possible upside, analysts clearly believe Xcel Brands is more favorable than Guess?.

Dividends

Guess? pays an annual dividend of $0.90 per share and has a dividend yield of 5.8%. Xcel Brands does not pay a dividend. Guess? pays out 818.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Guess? has increased its dividend for 3 consecutive years.

Institutional & Insider Ownership

17.3% of Xcel Brands shares are owned by institutional investors. Comparatively, 79.5% of Guess? shares are owned by institutional investors. 62.2% of Xcel Brands shares are owned by insiders. Comparatively, 29.6% of Guess? shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Xcel Brands and Guess?’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Xcel Brands $32.08 million 2.11 $4.00 million $0.14 30.36
Guess? $2.25 billion 0.58 $137.42 million $0.11 142.18

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

Summary

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

About Xcel Brands

Xcel Brands, Inc. is a brand development and media company. The Company is engaged in the design, production, licensing, marketing, and direct to consumer sales of branded apparel, footwear, accessories, jewelry, home goods, and other consumer products, and the acquisition of consumer lifestyle brands. The Company’s brand portfolio consists of the Isaac Mizrahi, Judith Ripka, H Halston, C Wonder and Highline Collective brands. The Company also manages and designs the Liz Claiborne New York brand (LCNY Brand). Isaac Mizrahi has over 150 different product categories, including sportswear, footwear, handbags, watches, eyewear, fragrance, tech accessories, intimates, bridal gowns and accessories, pet products, home and other merchandise. The Company’s Judith Ripka is a luxury jewelry brand. Wonder brand offers women’s clothing, footwear, jewelry and accessories; housewares, and home decor and gifts. The Liz Claiborne New York includes women’s apparel, footwear, outerwear and accessories.

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.

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