Chico’s FAS (NYSE: CHS) and bebe stores, inc. (NASDAQ:BEBE) 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 earnings, valuation, risk, institutional ownership, profitability, analyst recommendations and dividends.

Risk and Volatility

Chico’s FAS has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500. Comparatively, bebe stores, inc. has a beta of 2.67, suggesting that its stock price is 167% more volatile than the S&P 500.

Earnings & Valuation

This table compares Chico’s FAS and bebe stores, inc.’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Chico’s FAS $2.42 billion 0.41 $281.35 million $0.71 11.01
bebe stores, inc. $349.81 million 0.12 -$29.60 million ($4.96) -1.05

Chico’s FAS has higher revenue and earnings than bebe stores, inc.. bebe stores, inc. is trading at a lower price-to-earnings ratio than Chico’s FAS, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Chico’s FAS and bebe stores, inc.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chico’s FAS 3.86% 17.36% 9.57%
bebe stores, inc. -11.36% -66.82% -45.84%

Insider and Institutional Ownership

11.4% of bebe stores, inc. shares are owned by institutional investors. 3.0% of Chico’s FAS shares are owned by insiders. Comparatively, 59.0% of bebe stores, inc. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Chico’s FAS pays an annual dividend of $0.33 per share and has a dividend yield of 4.2%. bebe stores, inc. does not pay a dividend. Chico’s FAS pays out 46.5% of its earnings in the form of a dividend. bebe stores, inc. has increased its dividend for 7 consecutive years.

Analyst Ratings

This is a summary of current ratings for Chico’s FAS and bebe stores, inc., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chico’s FAS 0 9 5 0 2.36
bebe stores, inc. 0 0 0 0 N/A

Chico’s FAS presently has a consensus target price of $13.58, indicating a potential upside of 73.70%. Given Chico’s FAS’s higher possible upside, equities research analysts clearly believe Chico’s FAS is more favorable than bebe stores, inc..

Summary

Chico’s FAS beats bebe stores, inc. on 10 of the 15 factors compared between the two stocks.

About Chico’s FAS

Chico’s FAS, Inc. is an omni-channel specialty retailer of women’s private branded, casual-to-dressy clothing, intimates and accessories, operating under the Chico’s, White House Black Market (WHBM) and Soma brand names. The Company is also engaged in the sale of merchandise in its domestic and international retail stores. The Chico’s brand sells private branded clothing focusing on women 45 and older. Chico’s apparel includes the Black Label, Zenergy and Travelers collections. The WHBM brand sells private branded clothing focusing on women 35 and older. WHBM sells clothing and accessory items, including everyday basics, wear-to-work, denim and occasion. It offers black and white color palette. The accessories at WHBM include shoes, belts, scarves, handbags and jewelry. The Soma brand sells private branded lingerie, sleepwear, loungewear, activewear and beauty products focusing on women 35 and older. The lingerie category includes bras, panties, shapewear and swimwear.

About bebe stores, inc.

bebe stores, inc. designs, develops and produces a range of contemporary women’s apparel and accessories. The Company’s product offering includes a range of separates, tops, dresses, active wear and accessories for a range of occasions. It designs and develops its merchandise in-house, which is manufactured to its specifications and it also sources directly from third-party manufacturers. The Company also offers accessories, which include jewelry, optical, fragrance, shoes and handbags. The Company operates stores in the United States, Puerto Rico and Canada. In addition, it has an online store at www.bebe.com that ships to customers in the United States, Canada, Puerto Rico, the United States Protectorates and internationally via its third-party providers, International Checkout and Shoprunner. It has international stores operated by licensees in South East Asia, the United Arab Emirates, Russia, South America, Turkey and other territories.

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