Lands’ End (LE) versus Stein Mart (SMRT) Critical Analysis

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

Risk and Volatility

Lands’ End has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500. Comparatively, Stein Mart has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Lands’ End and Stein Mart, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lands’ End 0 1 0 0 2.00
Stein Mart 0 0 0 0 N/A

Lands’ End currently has a consensus target price of $15.00, indicating a potential upside of 16.28%. Given Lands’ End’s higher probable upside, research analysts plainly believe Lands’ End is more favorable than Stein Mart.

Dividends

Stein Mart pays an annual dividend of $0.15 per share and has a dividend yield of 11.7%. Lands’ End does not pay a dividend. Stein Mart pays out -27.3% of its earnings in the form of a dividend.

Profitability

This table compares Lands’ End and Stein Mart’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%
Stein Mart -1.89% -34.59% -4.43%

Valuation and Earnings

This table compares Lands’ End and Stein Mart’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Lands’ End $1.34 billion 0.31 $39.65 million ($3.55) -3.63
Stein Mart $1.33 billion 0.05 $326,000.00 ($0.55) -2.33

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

Insider and Institutional Ownership

60.5% of Lands’ End shares are owned by institutional investors. Comparatively, 33.0% of Stein Mart shares are owned by institutional investors. 0.5% of Lands’ End shares are owned by insiders. Comparatively, 34.7% of Stein Mart shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Lands’ End beats Stein Mart on 7 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.

Stein Mart Company Profile

Stein Mart, Inc. is a national retailer offering the fashion merchandise, service and presentation of a department or specialty store. The Company offers apparel for women and men, as well as accessories, shoes and home fashions. The Company’s target customers are women over 45 years old. The Company operates approximately 280 stores in over 30 states and an Internet store. Its stores are located in the Northeast, Midwest, Southeast, Texas and the Southwest. It is concentrated in the Southeast and Texas where over 180 of its stores are located. The Company’s stores offer a range of services, such as merchandise locator service, a Preferred Customer program, co-branded and private label credit card programs, and electronic gift cards. The Company’s merchants purchase products from approximately 1,200 vendors. It leases all of its store locations, generally for approximately 10 years with options to extend the lease term for over two or five year periods.

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