Boot Barn (BOOT) & Designer Brands (DBI) Critical Contrast

Boot Barn (NYSE:BOOT) and Designer Brands (NYSE:DBI) are both small-cap retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.

Profitability

This table compares Boot Barn and Designer Brands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Boot Barn 4.93% 13.54% 5.14%
Designer Brands -0.64% 14.76% 9.03%

Institutional & Insider Ownership

85.5% of Designer Brands shares are owned by institutional investors. 2.0% of Boot Barn shares are owned by company insiders. Comparatively, 17.4% of Designer Brands shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Boot Barn and Designer Brands, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Boot Barn 0 2 7 0 2.78
Designer Brands 0 0 0 1 4.00

Boot Barn presently has a consensus price target of $30.00, indicating a potential upside of 10.46%. Designer Brands has a consensus price target of $23.00, indicating a potential upside of 12.52%. Given Designer Brands’ stronger consensus rating and higher possible upside, analysts clearly believe Designer Brands is more favorable than Boot Barn.

Risk and Volatility

Boot Barn has a beta of 2.25, meaning that its share price is 125% more volatile than the S&P 500. Comparatively, Designer Brands has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.

Valuation and Earnings

This table compares Boot Barn and Designer Brands’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Boot Barn $677.95 million 1.13 $28.87 million $0.70 38.80
Designer Brands $3.18 billion 0.50 -$20.47 million $1.66 12.31

Boot Barn has higher earnings, but lower revenue than Designer Brands. Designer Brands is trading at a lower price-to-earnings ratio than Boot Barn, indicating that it is currently the more affordable of the two stocks.

Dividends

Designer Brands pays an annual dividend of $1.00 per share and has a dividend yield of 4.9%. Boot Barn does not pay a dividend. Designer Brands pays out 60.2% of its earnings in the form of a dividend.

Summary

Designer Brands beats Boot Barn on 10 of the 17 factors compared between the two stocks.

Boot Barn Company Profile

Boot Barn Holdings, Inc., a lifestyle retail chain, operates specialty retail stores in the United States. The company's specialty retail stores offer western and work-related footwear, apparel, and accessories for men, women, and kids. It offers boots, shirts, jackets, hats, belts and belt buckles, handbags, western-style jewelry, rugged footwear, outerwear, overalls, denim, and flame-resistant and high-visibility clothing. The company also provides gifts and home merchandise. As of August 7, 2018, it operated 232 stores in 31 states. Boot Barn Holdings, Inc. also sells its products through e-commerce Websites, including bootbarn.com; sheplers.com; and countryoutfitter.com. The company was formerly known as WW Top Investment Corporation and changed its name to Boot Barn Holdings, Inc. in June 2014. Boot Barn Holdings, Inc. was founded in 1978 and is based in Irvine, California.

Designer Brands Company Profile

Designer Brands Inc. designs, producers, and retails footwear and accessories for women, men, and kids primarily in North America. It operates through three segments: The U.S. Retail, the Canada Retail, and the Brand Portfolio. The company also provides handbags, hosiery, jewelry, and other accessories. The company offers its products under the Vince Camuto, Louise et Cie, Sole Society, CC Corso Como, Enzo Angiolini, Jessica Simpson, Lucky, and other brands. It operates vincecamuto.com and solesociety.com e-commerce sites. As of March 19, 2019, it operated a portfolio of retail concepts in approximately 1,000 locations under the DSW Designer Shoe Warehouse, The Shoe Company, and Shoe Warehouse banners. Designer Brands Inc. is based in Columbus, Ohio.

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