Financial Comparison: Gap, Inc. (The) (GPS) versus Express (EXPR)

Gap, Inc. (The) (NYSE: GPS) and Express (NYSE:EXPR) are both retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, earnings, dividends, valuation and profitability.

Analyst Recommendations

This is a breakdown of current ratings for Gap, Inc. (The) and Express, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gap, Inc. (The) 3 17 6 0 2.12
Express 0 11 2 0 2.15

Gap, Inc. (The) presently has a consensus target price of $25.89, suggesting a potential upside of 11.84%. Express has a consensus target price of $11.05, suggesting a potential upside of 75.88%. Given Express’ stronger consensus rating and higher probable upside, analysts clearly believe Express is more favorable than Gap, Inc. (The).

Profitability

This table compares Gap, Inc. (The) and Express’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gap, Inc. (The) 4.46% 29.75% 10.69%
Express 1.85% 5.83% 3.04%

Dividends

Gap, Inc. (The) pays an annual dividend of $0.92 per share and has a dividend yield of 4.0%. Express does not pay a dividend. Gap, Inc. (The) pays out 53.2% of its earnings in the form of a dividend. Express has increased its dividend for 7 consecutive years.

Valuation and Earnings

This table compares Gap, Inc. (The) and Express’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gap, Inc. (The) $15.52 billion 0.59 $2.05 billion $1.73 13.38
Express $2.16 billion 0.23 $161.73 million $0.51 12.31

Gap, Inc. (The) has higher revenue and earnings than Express. Express is trading at a lower price-to-earnings ratio than Gap, Inc. (The), indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

56.4% of Gap, Inc. (The) shares are owned by institutional investors. Comparatively, 96.5% of Express shares are owned by institutional investors. 27.3% of Gap, Inc. (The) shares are owned by insiders. Comparatively, 2.6% of Express shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Gap, Inc. (The) has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Express has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500.

Summary

Gap, Inc. (The) beats Express on 10 of the 17 factors compared between the two stocks.

Gap, Inc. (The) Company Profile

The Gap, Inc. (Gap Inc.) is an apparel retail company. The Company offers apparel, accessories and personal care products for men, women and children under the Gap, Banana Republic, Old Navy, Athleta and Intermix brands. Its products are available to customers online through Company-owned Websites and through the use of third-parties that provide logistics and fulfillment services. In addition to operating in the specialty, outlet, online and franchise channels, it also uses the Company’s omni-channel capabilities to bridge the digital world and physical stores. Its omni-channel services, including order-in-store, reserve-in-store, find-in-store and ship-from-store are tailored across its portfolio of brands. It also sells products that are designed and manufactured by branded third-parties, especially at its Intermix brands. It has Company-operated stores in the United States, Canada, the United Kingdom, France, Ireland, Japan, Italy, China, Hong Kong, Taiwan, and Mexico.

Express Company Profile

Express, Inc. is a specialty apparel and accessories retailer offering both women’s and men’s merchandise. The Company targets women and men between 20 and 30 years old. It offers an assortment of fashionable apparel and accessories to address fashion needs across multiple aspects of lifestyles, including work, casual, jeanswear and going-out occasions. It is engaged in the operation of its brick-and-mortar retail and outlet stores, e-commerce operations and franchise operations. It sells its products through its e-commerce Website, www.express.com and its mobile application, and has franchise agreements with franchisees that operate Express locations in Latin America. It operated 656 stores across the United States, in Canada and in Puerto Rico, including 104 factory outlet stores, as of January 28, 2017. Its products are created by its in-house design team. Its portfolio of apparel products includes brands, such as Portofino shirt, Editor pant and 1MX shirt.

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