Buckle, Inc. (The) (NYSE:BKE) and Ascena Retail Group (ASNA) Critical Review

Buckle, Inc. (The) (NYSE: BKE) and Ascena Retail Group (NASDAQ:ASNA) are both small-cap retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, dividends, valuation, profitability, risk, earnings and institutional ownership.

Volatility & Risk

Buckle, Inc. (The) has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, Ascena Retail Group has a beta of 1.93, meaning that its stock price is 93% more volatile than the S&P 500.

Earnings & Valuation

This table compares Buckle, Inc. (The) and Ascena Retail Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Buckle, Inc. (The) $927.07 million 0.90 $167.12 million $1.80 9.58
Ascena Retail Group $6.65 billion 0.06 $545.70 million ($5.48) -0.36

Ascena Retail Group has higher revenue and earnings than Buckle, Inc. (The). Ascena Retail Group is trading at a lower price-to-earnings ratio than Buckle, Inc. (The), indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Buckle, Inc. (The) and Ascena Retail Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Buckle, Inc. (The) 1 0 0 0 1.00
Ascena Retail Group 1 8 0 0 1.89

Buckle, Inc. (The) presently has a consensus target price of $13.00, suggesting a potential downside of 24.64%. Ascena Retail Group has a consensus target price of $3.50, suggesting a potential upside of 78.57%. Given Ascena Retail Group’s stronger consensus rating and higher possible upside, analysts clearly believe Ascena Retail Group is more favorable than Buckle, Inc. (The).

Dividends

Buckle, Inc. (The) pays an annual dividend of $1.00 per share and has a dividend yield of 5.8%. Ascena Retail Group does not pay a dividend. Buckle, Inc. (The) pays out 55.6% of its earnings in the form of a dividend. Buckle, Inc. (The) has raised its dividend for 3 consecutive years.

Insider and Institutional Ownership

59.5% of Buckle, Inc. (The) shares are held by institutional investors. Comparatively, 95.6% of Ascena Retail Group shares are held by institutional investors. 41.7% of Buckle, Inc. (The) shares are held by company insiders. Comparatively, 8.6% of Ascena Retail Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Buckle, Inc. (The) and Ascena Retail Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Buckle, Inc. (The) 9.40% 19.96% 15.04%
Ascena Retail Group -16.05% 3.13% 0.90%

Summary

Buckle, Inc. (The) beats Ascena Retail Group on 9 of the 16 factors compared between the two stocks.

About Buckle, Inc. (The)

The Buckle, Inc. is a retailer of casual apparel, footwear and accessories for young men and women. As of January 28, 2017, the Company operated 467 retail stores in 44 states throughout the United States under the names Buckle and The Buckle. The Company markets a selection of brand name casual apparel, including denims, other casual bottoms, tops, sportswear, outerwear, accessories and footwear. The Company provides customer services, such as free hemming, free gift-wrapping, easy layaways, the Buckle private label credit card, and a guest loyalty program. The Company offers denims from brands, such as Miss Me, Rock Revival, Big Star Vintage, Buffalo Jeans, KanCan, Flying Monkey and Levi’s. Its other brands include Hurley, Billabong, Affliction, American Fighter, Fast & Furious, Oakley, Fox, Puma, Obey, RVCA, Salvage, 7 Diamonds, Nixon, Amuse Society, Free People, White Crow, Corral, Reef, Kustom, Timberland, UGG, TOMS, SAXX, Stance, Lokai, Ray-Ban, and Fossil.

About Ascena Retail Group

Ascena Retail Group, Inc. is a specialty retailer of apparel for women and tween girls. The Company operates through six segments: ANN, Justice, Lane Bryant, maurices, dressbarn and Catherines. The ANN segment offers feminine classics and fashion choices, sold primarily under the Ann Taylor and LOFT brands. The Justice segment offers apparel to girls who are aged 6 to 12. The Lane Bryant segment offers apparel to female customers in plus-sizes 14-28. The maurices segment offers women’s casual clothing, career wear, dressy apparel, active wear and accessories. The dressbarn segment consists of the specialty retail, outlet and e-commerce operations of the dressbarn brand. The Catherines segment offers classic apparel and accessories to female customers for wear-to-work and casual lifestyles. As of July 30, 2016, the Company operated approximately 4,900 stores in 49 United States’ states, the District of Columbia, Canada and Puerto Rico.

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