Differential Brands Group (NASDAQ: DFBG) and Duluth Holdings (NASDAQ:DLTH) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, profitability, earnings, dividends, valuation, risk and analyst recommendations.

Valuation and Earnings

This table compares Differential Brands Group and Duluth Holdings’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Differential Brands Group $159.73 million 0.09 $4.56 million ($1.07) -1.03
Duluth Holdings $411.57 million 1.60 $37.84 million $0.58 34.91

Duluth Holdings has higher revenue and earnings than Differential Brands Group. Differential Brands Group is trading at a lower price-to-earnings ratio than Duluth Holdings, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Differential Brands Group and Duluth Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Differential Brands Group -8.85% -29.02% -7.53%
Duluth Holdings 4.64% 17.05% 11.69%

Insider and Institutional Ownership

1.6% of Differential Brands Group shares are held by institutional investors. Comparatively, 33.6% of Duluth Holdings shares are held by institutional investors. 62.5% of Differential Brands Group shares are held by company insiders. Comparatively, 70.4% of Duluth Holdings shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Differential Brands Group has a beta of -1.74, meaning that its share price is 274% less volatile than the S&P 500. Comparatively, Duluth Holdings has a beta of 0.2, meaning that its share price is 80% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Differential Brands Group and Duluth Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Differential Brands Group 0 0 2 0 3.00
Duluth Holdings 0 3 5 0 2.63

Differential Brands Group presently has a consensus target price of $5.00, suggesting a potential upside of 354.55%. Duluth Holdings has a consensus target price of $27.01, suggesting a potential upside of 33.36%. Given Differential Brands Group’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Differential Brands Group is more favorable than Duluth Holdings.

Summary

Duluth Holdings beats Differential Brands Group on 11 of the 13 factors compared between the two stocks.

Differential Brands Group Company Profile

Differential Brands Group Inc., formerly Joe’s Jeans Inc., is engaged in the design, development and marketing of apparel products, which include denim jeans, related casual wear and accessories. The Company offers its products under various brands, such as Hudson, Robert Graham and SWIMS. Its segments are Wholesale and Retail. Its Wholesale segment consists of sales of Hudson products to retailers, specialty stores and international distributors. Its Retail segment consists of sales of its products to consumers through its retail Internet sites for Hudson products. The Hudson product line includes women’s, men’s and children’s denim jeans, pants and other bottoms. The Robert Graham product line includes men’s sport shirts, pants, sweaters, knits, t-shirts, sportcoats, outerwear and swimwear. Through SWIMS brand, it distributes a range of footwear, swimwear, outerwear, ready-to-wear and accessories across the world through department stores, independent specialty and luxury resorts.

Duluth Holdings Company Profile

Duluth Holdings Inc. is a lifestyle brand of men’s and women’s casual wear, workwear and accessories. The Company offers a line of functional products, such as its Longtail T shirts, Buck Naked underwear and Fire Hose work pants. The Company’s segments include direct and retail. The direct segment includes revenues from the Company’s Website and catalogs. The retail segment includes revenues from the Company’s retail and outlet stores. The Company offers its products under the Duluth Trading brand. The Company’s Website, www.duluthtrading.com, serves as a storefront for its product assortment. As of January 29, 2017, the Company operated 14 retail stores and two outlet stores. The Company’s stores range in size from approximately 6,000 to 14,000 selling square feet. The Company’s products also include Ballroom jeans, Duluthflex clothing, Armachillo shirts, Dry on the Fly pants, Armachillo underwear and No-Yank Tank.

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