Analyzing Victoria’s Secret & Co. (NYSE:VSCO) and Boot Barn (NYSE:BOOT)

Boot Barn (NYSE:BOOT) and Victoria’s Secret & Co. (NYSE:VSCO) are both mid-cap retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Earnings and Valuation

This table compares Boot Barn and Victoria’s Secret & Co.”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Boot Barn	$1.91 billion	2.93	$180.94 million	$6.76	27.22
Victoria’s Secret & Co.	$6.23 billion	0.77	$165.00 million	$2.05	29.13

Boot Barn has higher earnings, but lower revenue than Victoria’s Secret & Co.. Boot Barn 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.

Institutional and Insider Ownership

90.3% of Victoria’s Secret & Co. shares are owned by institutional investors. 0.7% of Boot Barn shares are owned by company insiders. Comparatively, 0.5% of Victoria’s Secret & Co. shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Boot Barn and Victoria’s Secret & Co., as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Boot Barn	0	4	11	0	2.73
Victoria’s Secret & Co.	1	5	7	1	2.57

Boot Barn presently has a consensus target price of $206.08, suggesting a potential upside of 12.00%. Victoria’s Secret & Co. has a consensus target price of $54.60, suggesting a potential downside of 8.58%. Given Boot Barn’s stronger consensus rating and higher possible upside, research analysts clearly believe Boot Barn is more favorable than Victoria’s Secret & Co..

Risk & Volatility

Boot Barn has a beta of 1.61, suggesting that its stock price is 61% more volatile than the S&P 500. Comparatively, Victoria’s Secret & Co. has a beta of 2.21, suggesting that its stock price is 121% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Boot Barn	10.05%	18.11%	9.94%
Victoria’s Secret & Co.	2.67%	33.47%	4.82%

Summary

Boot Barn beats Victoria’s Secret & Co. on 9 of the 15 factors compared between the two stocks.

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.

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.