Head to Head Comparison: Shoe Carnival (SCVL) and Foot Locker (FL)

Shoe Carnival (NASDAQ: SCVL) and Foot Locker (NYSE:FL) are both retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, risk, institutional ownership and dividends.

Dividends

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Shoe Carnival pays an annual dividend of $0.30 per share and has a dividend yield of 1.3%. Foot Locker pays an annual dividend of $1.38 per share and has a dividend yield of 3.4%. Shoe Carnival pays out 20.1% of its earnings in the form of a dividend. Foot Locker pays out 33.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Foot Locker has raised its dividend for 7 consecutive years. Foot Locker is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent ratings and price targets for Shoe Carnival and Foot Locker, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shoe Carnival 0 3 4 0 2.57
Foot Locker 1 10 16 0 2.56

Shoe Carnival currently has a consensus target price of $26.67, indicating a potential upside of 12.85%. Foot Locker has a consensus target price of $54.70, indicating a potential upside of 33.81%. Given Foot Locker’s higher probable upside, analysts plainly believe Foot Locker is more favorable than Shoe Carnival.

Profitability

This table compares Shoe Carnival and Foot Locker’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shoe Carnival 1.86% 8.02% 5.45%
Foot Locker 3.65% 19.32% 13.49%

Earnings & Valuation

This table compares Shoe Carnival and Foot Locker’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Shoe Carnival $1.02 billion 0.38 $18.93 million $1.49 15.86
Foot Locker $7.78 billion 0.64 $284.00 million $4.11 9.95

Foot Locker has higher revenue and earnings than Shoe Carnival. Foot Locker is trading at a lower price-to-earnings ratio than Shoe Carnival, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Shoe Carnival has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500. Comparatively, Foot Locker has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500.

Institutional and Insider Ownership

80.5% of Shoe Carnival shares are held by institutional investors. Comparatively, 96.1% of Foot Locker shares are held by institutional investors. 28.5% of Shoe Carnival shares are held by company insiders. Comparatively, 2.1% of Foot Locker shares are held by company 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

Foot Locker beats Shoe Carnival on 13 of the 17 factors compared between the two stocks.

About Shoe Carnival

Shoe Carnival, Inc., together with its subsidiaries, operates as family footwear retailer in the United States. It provides various dress, casual, and athletic footwear products for men, women, and children, as well as accessories, including socks, belts, shoe care items, handbags, sport bags, backpacks, jewelry, scarves, and wallets. As of November 16, 2017, the company operated 424 stores in 35 states and Puerto Rico. It sells its products through online shopping at shoecarnival.com. Shoe Carnival, Inc. was founded in 1978 and is headquartered in Evansville, Indiana.

About Foot Locker

Foot Locker, Inc., through its subsidiaries, operates as an athletic shoes and apparel retailer. The company operates in two segments, Athletic Stores and Direct-to-Customers. The Athletic Stores segment retails athletic footwear, apparel, accessories, and equipment under various formats, including Foot Locker, Kids Foot Locker, Lady Foot Locker, Champs Sports, Footaction, Runners Point, Sidestep, and SIX:02. The Direct-to-Customers segment sells athletic footwear, apparel, equipment, and team licensed merchandise for high school and other athletes through Internet and mobile sites, and catalogs. This segment operates sites for eastbay.com, final-score.com, and eastbayteamsales.com, as well as footlocker.com, ladyfootlocker.com, six02.com, kidsfootlocker.com, champssports.com, footaction.com, footlocker.ca, footlocker.eu, footlocker.au, runnerspoint.com, and sidestep-shoes.com. As of February 3, 2018, the company operated 3,310 stores in 24 countries in North America, Europe, Australia, and New Zealand, as well as 98 franchised Foot Locker stores in the Middle East and 14 franchised Runners Point stores in Germany. Foot Locker, Inc. was founded in 1879 and is headquartered in New York, New York.

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