Children’s Place (NASDAQ:PLCE) vs. Boot Barn (NYSE:BOOT) Financial Analysis

Children’s Place (NASDAQ:PLCE) and Boot Barn (NYSE:BOOT) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, profitability, analyst recommendations, dividends and risk.

Dividends

Children’s Place pays an annual dividend of $2.24 per share and has a dividend yield of 30.4%. Boot Barn pays an annual dividend of $0.50 per share and has a dividend yield of 0.3%. Children’s Place pays out -260.5% of its earnings in the form of a dividend. Boot Barn pays out 7.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Children’s Place is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Children’s Place and Boot Barn”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Children’s Place	$1.34 billion	0.12	-$57.82 million	($0.86)	-8.58
Boot Barn	$2.07 billion	2.72	$180.94 million	$6.76	27.33

Boot Barn has higher revenue and earnings than Children’s Place. Children’s Place is trading at a lower price-to-earnings ratio than Boot Barn, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Children’s Place and Boot Barn’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Children’s Place	-2.04%	-10.32%	-2.45%
Boot Barn	10.05%	18.41%	10.20%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Children’s Place and Boot Barn, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Children’s Place	1	1	0	0	1.50
Boot Barn	0	4	11	1	2.81

Children’s Place presently has a consensus target price of $8.00, suggesting a potential upside of 8.40%. Boot Barn has a consensus target price of $195.75, suggesting a potential upside of 5.96%. Given Children’s Place’s higher probable upside, equities analysts clearly believe Children’s Place is more favorable than Boot Barn.

Risk and Volatility

Children’s Place has a beta of 2.25, suggesting that its share price is 125% more volatile than the S&P 500. Comparatively, Boot Barn has a beta of 1.67, suggesting that its share price is 67% more volatile than the S&P 500.

Summary

Boot Barn beats Children’s Place on 11 of the 15 factors compared between the two stocks.

About Children’s Place

The Children’s Place, Inc. engages in the provision of apparel, footwear, accessories, and other items for children. The firm also designs contracts to manufacture and sell fashionable and value-priced merchandise under the brand names of The Children’s Place, Baby Place, and Gymboree. It operates through The Children’s Place U.S. and The Children’s Place International segments. The Children’s Place U.S. segment refers to the company’s U.S. and Puerto Rico-based stores and revenue from its U.S. based wholesale business. The Children’s Place International segment is involved in the Canadian-based stores, revenue from the company’s Canadian-based wholesale business, as well as revenue from international franchisees. The company was founded by David Pulver and Clinton A. Clark in 1969 and is headquartered in Secaucus, NJ.

About Boot Barn

Boot Barn Holdings, Inc., a lifestyle retail chain, operates specialty retail stores in the United States. The company's specialty retail stores offer western and work-related footwear, apparel, and accessories for men, women, and kids. It offers boots, shirts, jackets, hats, belts and belt buckles, handbags, western-style jewelry, rugged footwear, outerwear, overalls, denim, and flame-resistant and high-visibility clothing. The company also provides gifts and home merchandise. The company also sells its products through e-commerce websites, including bootbarn.com; sheplers.com; and countryoutfitter.com. The company was formerly known as WW Top Investment Corporation and changed its name to Boot Barn Holdings, Inc. in June 2014. Boot Barn Holdings, Inc. was founded in 1978 and is based in Irvine, California.