DSW (NYSE: DSW) and Boot Barn Holdings (NYSE:BOOT) are both small-cap retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitabiliy, dividends, valuation and institutional ownership.
Profitability
This table compares DSW and Boot Barn Holdings’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| DSW | 4.32% | 12.06% | 7.81% |
| Boot Barn Holdings | 2.26% | 8.58% | 2.66% |
Risk and Volatility
DSW has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, Boot Barn Holdings has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500.
Earnings & Valuation
This table compares DSW and Boot Barn Holdings’ top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| DSW | $2.72 billion | 0.54 | $263.39 million | $1.43 | 12.86 |
| Boot Barn Holdings | $635.78 million | 0.39 | $56.20 million | $0.54 | 17.11 |
DSW has higher revenue and earnings than Boot Barn Holdings. DSW is trading at a lower price-to-earnings ratio than Boot Barn Holdings, indicating that it is currently the more affordable of the two stocks.
Dividends
DSW pays an annual dividend of $0.80 per share and has a dividend yield of 4.4%. Boot Barn Holdings does not pay a dividend. DSW pays out 55.9% of its earnings in the form of a dividend.
Analyst Ratings
This is a summary of current recommendations for DSW and Boot Barn Holdings, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| DSW | 0 | 12 | 4 | 0 | 2.25 |
| Boot Barn Holdings | 0 | 2 | 5 | 0 | 2.71 |
DSW currently has a consensus target price of $20.88, suggesting a potential upside of 13.57%. Boot Barn Holdings has a consensus target price of $10.43, suggesting a potential upside of 12.86%. Given DSW’s higher possible upside, equities analysts plainly believe DSW is more favorable than Boot Barn Holdings.
Institutional and Insider Ownership
89.3% of DSW shares are held by institutional investors. 20.4% of DSW shares are held by insiders. Comparatively, 4.6% of Boot Barn Holdings shares are held 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
DSW beats Boot Barn Holdings on 11 of the 16 factors compared between the two stocks.
About DSW
DSW Inc. is a footwear retailer. The Company offers an assortment of brand name dress, casual and athletic footwear and accessories for women, men and kids. The Company operates through two segments: the DSW segment (DSW), which includes DSW stores and dsw.com, and the Affiliated Business Group (ABG) segment. As of January 28, 2017, the Company operated 501 DSW stores, dsw.com and shoe departments in 288 Stein Mart stores and Steinmart.com, 106 Gordmans stores and Gordmans.com, and one Frugal Fannie’s store. DSW separates its merchandise into three primary categories: women’s footwear; men’s footwear, and accessories and other (which includes kids’ footwear). Other primarily includes Ebuys and its investment in Town Shoes. The ABG segment partners with three other retailers to help build and optimize their in-store and online footwear businesses.
About Boot Barn Holdings
Boot Barn Holdings, Inc. is a lifestyle retailer of western and work-related footwear, apparel and accessories for men, women and children. The Company’s stores are located in or near neighborhood shopping centers with trade areas of approximately five or more miles, and it has opened stores in malls and outlet center locations. The Company’s stores average an area of approximately 11,490 square feet and feature an assortment of brands and styles. It also carries assortments of denim, western shirts, cowboy hats, belts and belt buckles, western-style jewelry and accessories. The Company’s western assortment includes various brands, such as Ariat, Dan Post, Justin, Levi Strauss, Lucchese, Miss Me, Montana Silversmiths, Resistol and Wrangler. Its work assortment includes rugged footwear, outerwear, overalls, denim and shirts. Its other brands include Carhartt, Georgia, Timberland Pro and Wolverine. As of March 26, 2016, the Company operated 208 stores in 29 states.
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