Head to Head Analysis: Li Ning (OTCMKTS:LNNGY) & Victoria’s Secret & Co. (NYSE:VSCO)

Victoria’s Secret & Co. (NYSE:VSCO) and Li Ning (OTCMKTS:LNNGY) are both mid-cap retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, earnings, dividends, profitability, valuation and risk.

Volatility and Risk

Victoria’s Secret & Co. has a beta of 2.24, suggesting that its stock price is 124% more volatile than the S&P 500. Comparatively, Li Ning has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Profitability

This table compares Victoria’s Secret & Co. and Li Ning’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Victoria’s Secret & Co.	2.67%	33.47%	4.82%
Li Ning	N/A	N/A	N/A

Institutional and Insider Ownership

90.3% of Victoria’s Secret & Co. shares are held by institutional investors. 0.5% of Victoria’s Secret & Co. shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Victoria’s Secret & Co. and Li Ning, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Victoria’s Secret & Co.	1	5	7	1	2.57
Li Ning	0	1	0	0	2.00

Victoria’s Secret & Co. currently has a consensus target price of $53.30, indicating a potential downside of 2.38%. Given Victoria’s Secret & Co.’s stronger consensus rating and higher possible upside, equities analysts clearly believe Victoria’s Secret & Co. is more favorable than Li Ning.

Valuation and Earnings

This table compares Victoria’s Secret & Co. and Li Ning”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Victoria’s Secret & Co.	$6.23 billion	0.70	$165.00 million	$2.05	26.63
Li Ning	$3.99 billion	1.61	$419.10 million	N/A	N/A

Li Ning has lower revenue, but higher earnings than Victoria’s Secret & Co..

Summary

Victoria’s Secret & Co. beats Li Ning on 11 of the 13 factors compared between the two stocks.

About Victoria’s Secret & Co.

Victoria’s Secret & Co. operates as a lingerie, clothing and beauty retailer. It offers bras, panties, lingerie, pajamas, sleep, sport and swim apparel, and beauty products. The company was founded in 1963 and is headquartered in Reynoldsburg, OH.

About Li Ning

Li Ning Company Limited, a sports brand company, engages in the research and development, design, manufacture, marketing, distribution, and retail of sporting goods in the People’s Republic of China. The company offers sporting goods, including professional and leisure footwear, apparel, equipment, and accessories under the LI-NING brand. It also develops, manufactures, markets, distributes, and/or sells outdoor sports products under the AIGLE brand; table tennis products under the Double Happiness brand name; fashionable fitness products for dance and yoga under the Danskin brand; and badminton products under the Kason brand name. The company also provides brand licensing, administrative, and property management services. It operates conventional stores, flagship stores, China LI-NING stores, LI-NING 1990 stores, factory outlets, and multi-brand stores under the LI-NING brand. The company was founded in 1990 and is headquartered in Beijing, the People’s Republic of China.