Contrasting Express (EXPR) & Guess? (GES)

Express (NYSE: EXPR) and Guess? (NYSE:GES) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, dividends, valuation, profitability, institutional ownership, risk and analyst recommendations.

Profitability

This table compares Express and Guess?’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Express 0.60% 3.85% 2.03%
Guess? -0.10% 4.35% 2.72%

Earnings and Valuation

This table compares Express and Guess?’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Express $2.19 billion 0.26 $57.41 million $0.16 45.38
Guess? $2.21 billion 0.65 $22.76 million ($0.04) -438.00

Express has higher earnings, but lower revenue than Guess?. Guess? is trading at a lower price-to-earnings ratio than Express, indicating that it is currently the more affordable of the two stocks.

Dividends

Guess? pays an annual dividend of $0.90 per share and has a dividend yield of 5.1%. Express does not pay a dividend. Guess? pays out -2,250.0% of its earnings in the form of a dividend. Express has increased its dividend for 4 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Express and Guess?, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Express 0 9 0 0 2.00
Guess? 1 5 3 0 2.22

Express currently has a consensus target price of $9.05, indicating a potential upside of 24.66%. Guess? has a consensus target price of $14.74, indicating a potential downside of 15.87%. Given Express’ higher probable upside, research analysts plainly believe Express is more favorable than Guess?.

Institutional & Insider Ownership

99.1% of Express shares are owned by institutional investors. Comparatively, 82.4% of Guess? shares are owned by institutional investors. 2.6% of Express shares are owned by company insiders. Comparatively, 29.6% of Guess? shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Express has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500. Comparatively, Guess? has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500.

Summary

Guess? beats Express on 9 of the 17 factors compared between the two stocks.

About Express

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.

About Guess?

Guess?, Inc. designs, markets, distributes and licenses a lifestyle collections of apparel and accessories for men, women and children. The Company operates through five segments: Americas Retail, Europe, Asia, Americas Wholesale and Licensing. The Americas Retail segment includes the Company’s retail and e-commerce operations in North and Central America and its retail operations in South America. The Europe segment includes the Company’s retail, e-commerce and wholesale operations in Europe and the Middle East. The Asia segment includes the Company’s retail, e-commerce and wholesale operations in Asia. The Asia segment includes the Company’s retail, e-commerce and wholesale operations in Asia. The Licensing segment includes the around the world licensing operations of the Company. Its apparel is marketed under various names, including GUESS, GUESS?, GUESS U.S.A., GUESS Jeans, MARCIANO, Question Mark and Triangle Design, GUESS Kids, Baby GUESS, YES, G by GUESS and GUESS by MARCIANO.

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