Xcel Brands (NASDAQ: XELB) and Sequential Brands Group (NASDAQ:SQBG) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, analyst recommendations, profitability, earnings and valuation.

Risk & Volatility

Xcel Brands has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500. Comparatively, Sequential Brands Group has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500.

Institutional & Insider Ownership

20.3% of Xcel Brands shares are held by institutional investors. Comparatively, 51.0% of Sequential Brands Group shares are held by institutional investors. 59.9% of Xcel Brands shares are held by company insiders. Comparatively, 27.3% of Sequential Brands Group shares are held 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.

Earnings & Valuation

This table compares Xcel Brands and Sequential Brands Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Xcel Brands $32.75 million 1.26 $2.73 million $0.14 16.00
Sequential Brands Group $155.53 million 0.71 -$820,000.00 ($0.38) -4.61

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Xcel Brands and Sequential Brands Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xcel Brands 0 0 2 0 3.00
Sequential Brands Group 0 4 3 0 2.43

Xcel Brands currently has a consensus target price of $4.50, suggesting a potential upside of 100.89%. Sequential Brands Group has a consensus target price of $6.92, suggesting a potential upside of 295.24%. Given Sequential Brands Group’s higher possible upside, analysts plainly believe Sequential Brands Group is more favorable than Xcel Brands.

Profitability

This table compares Xcel Brands and Sequential Brands Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Xcel Brands 8.92% 2.34% 1.68%
Sequential Brands Group -14.35% 2.26% 0.85%

Summary

Xcel Brands beats Sequential Brands Group on 10 of the 14 factors compared between the two stocks.

About Xcel Brands

Xcel Brands, Inc. is a brand development and media company. The Company is engaged in the design, production, licensing, marketing, and direct to consumer sales of branded apparel, footwear, accessories, jewelry, home goods, and other consumer products, and the acquisition of consumer lifestyle brands. The Company’s brand portfolio consists of the Isaac Mizrahi, Judith Ripka, H Halston, C Wonder and Highline Collective brands. The Company also manages and designs the Liz Claiborne New York brand (LCNY Brand). Isaac Mizrahi has over 150 different product categories, including sportswear, footwear, handbags, watches, eyewear, fragrance, tech accessories, intimates, bridal gowns and accessories, pet products, home and other merchandise. The Company’s Judith Ripka is a luxury jewelry brand. Wonder brand offers women’s clothing, footwear, jewelry and accessories; housewares, and home decor and gifts. The Liz Claiborne New York includes women’s apparel, footwear, outerwear and accessories.

About Sequential Brands Group

Sequential Brands Group, Inc. owns a portfolio of consumer brands in the fashion, home, athletic and lifestyle categories. The Company’s portfolio of consumer brands includes Martha Stewart, Emeril Lagasse, Jessica Simpson, Joe’s Jeans, William Rast, Ellen Tracy, Revo, AND1 and Avia. The Company’s brands are licensed for a range of product categories, including apparel, footwear, eyewear, fashion accessories and home goods. The Company licenses brands to both wholesale and direct-to-retail licensees. The Company licenses the Martha Stewart brand to various licensees, including retailers, such as Macy’s, The Home Depot, PetSmart and Staples. The Jessica Simpson Collection is a signature lifestyle concept designed in collaboration with Jessica Simpson, which offers various product categories, including footwear, apparel, fragrance, fashion accessories, maternity apparel, girls clothing and a home line. The Avia brand offers running and activewear products.

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