Financial Review: Victoria’s Secret & Co. (NYSE:VSCO) versus Destination XL Group (NASDAQ:DXLG)

Destination XL Group (NASDAQ:DXLG) and Victoria’s Secret & Co. (NYSE:VSCO) are both retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, dividends, valuation and profitability.

Earnings & Valuation

This table compares Destination XL Group and Victoria’s Secret & Co.”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Destination XL Group	$467.02 million	0.07	$3.06 million	($0.14)	-4.07
Victoria’s Secret & Co.	$6.55 billion	0.56	$160.86 million	$1.86	24.72

Victoria’s Secret & Co. has higher revenue and earnings than Destination XL Group. Destination XL Group is trading at a lower price-to-earnings ratio than Victoria’s Secret & Co., indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Destination XL Group and Victoria’s Secret & Co.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Destination XL Group	-1.73%	-3.81%	-1.36%
Victoria’s Secret & Co.	2.45%	36.21%	5.19%

Institutional & Insider Ownership

73.5% of Destination XL Group shares are held by institutional investors. Comparatively, 90.3% of Victoria’s Secret & Co. shares are held by institutional investors. 14.3% of Destination XL Group shares are held by company insiders. Comparatively, 0.5% of Victoria’s Secret & Co. shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Destination XL Group has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500. Comparatively, Victoria’s Secret & Co. has a beta of 2.19, suggesting that its share price is 119% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Destination XL Group and Victoria’s Secret & Co., as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Destination XL Group	1	0	1	0	2.00
Victoria’s Secret & Co.	0	6	6	1	2.62

Destination XL Group presently has a consensus target price of $2.50, indicating a potential upside of 338.44%. Victoria’s Secret & Co. has a consensus target price of $60.20, indicating a potential upside of 30.93%. Given Destination XL Group’s higher possible upside, research analysts plainly believe Destination XL Group is more favorable than Victoria’s Secret & Co..

Summary

Victoria’s Secret & Co. beats Destination XL Group on 13 of the 15 factors compared between the two stocks.

About Destination XL Group

Destination XL Group, Inc., together with its subsidiaries, operates as a specialty retailer of big and tall men’s clothing and shoes in the United States. The company’s stores offer sportswear and dresswear; fashion-neutral items, including jeans, casual pants, T-shirts, polo shirts, dress shirts, and suit separates; and casual clothing. It also provides vintage-screen T-shirts and wovens under various private labels. The company offers its products under the trade names of Destination XL, DXL, DXL Men’s Apparel, DXL outlets, Casual Male XL, and Casual Male XL outlets. The company was formerly known as Casual Male Retail Group, Inc. and changed its name to Destination XL Group, Inc. in February 2013. Destination XL Group, Inc. was incorporated in 1976 and is headquartered in Canton, Massachusetts.

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.