Analyzing Genesco (GCO) & Finish Line (FINL)

Genesco (NYSE: GCO) and Finish Line (NASDAQ:FINL) are both small-cap retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, institutional ownership, earnings, valuation, risk and analyst recommendations.

Risk & Volatility

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Genesco has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500. Comparatively, Finish Line has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.

Insider & Institutional Ownership

99.2% of Genesco shares are held by institutional investors. Comparatively, 88.6% of Finish Line shares are held by institutional investors. 3.3% of Genesco shares are held by company insiders. Comparatively, 6.0% of Finish Line shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Genesco and Finish Line’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Genesco -3.85% 7.07% 4.10%
Finish Line 0.78% 6.32% 3.95%

Dividends

Finish Line pays an annual dividend of $0.46 per share and has a dividend yield of 3.4%. Genesco does not pay a dividend. Finish Line pays out 66.7% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings for Genesco and Finish Line, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genesco 0 6 4 0 2.40
Finish Line 3 15 1 0 1.89

Genesco presently has a consensus price target of $40.67, indicating a potential downside of 5.21%. Finish Line has a consensus price target of $11.34, indicating a potential downside of 16.11%. Given Genesco’s stronger consensus rating and higher probable upside, research analysts clearly believe Genesco is more favorable than Finish Line.

Earnings & Valuation

This table compares Genesco and Finish Line’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Genesco $2.91 billion 0.29 -$111.83 million $3.14 13.66
Finish Line $1.84 billion 0.30 $14.41 million $0.69 19.59

Finish Line has lower revenue, but higher earnings than Genesco. Genesco is trading at a lower price-to-earnings ratio than Finish Line, indicating that it is currently the more affordable of the two stocks.

Summary

Genesco beats Finish Line on 10 of the 16 factors compared between the two stocks.

About Genesco

Genesco Inc. retails and wholesales footwear, apparel, and accessories. The company's Journeys Group segment offers footwear and accessories through the Journeys, Journeys Kidz, Shi by Journeys, Little Burgundy, and Underground by Journeys retail stores, as well as through e-commerce and catalogs for young men, women, and children. Its Schuh Group segment operates Schuh retail footwear stores that offer casual and athletic footwear for men and women, as well as sells footwear through e-commerce. The company's Lids Sports Group segment operates headwear and accessory stores primarily under the Lids banner; Lids Locker Room and Lids Clubhouse stores, which sell licensed sports headwear, apparel, and accessories to sports fans; and Locker Room by Lids leased departments in Macy's department stores that sell headwear, apparel, accessories, and novelties from an assortment of college and professional teams, as well as sells headwear and accessories through e-commerce. Its Johnston & Murphy Group segment engages in retail, catalog, and e-commerce, as well as wholesale distribution of footwear, apparel, and accessories primarily for men. This segment also provides men's and women's footwear and leather accessories under the Trask brand through retailers and department stores, an e-commerce Website, and catalog. The company's Licensed Brands segment markets casual footwear under the Dockers brand for men; and G.H. Bass trademark footwear and other brands. As of March 15, 2018, it operated approximately 2,675 retail stores and leased departments in the United States, Canada, the United Kingdom, the Republic of Ireland, and Germany. The company's e-commerce Websites include journeys.com, journeyskidz.com, journeys.ca, shibyjourneys.com, schuh.co.uk, littleburgundyshoes.com, johnstonmurphy.com, lids.com, lids.ca, lidslockerroom.com, lidsclubhouse.com, neweracap.com, trask.com, and dockersshoes.com. Genesco Inc. was founded in 1924 and is headquartered in Nashville, Tennessee.

About Finish Line

The Finish Line, Inc., together with its subsidiaries, operates as a retailer of athletic shoes, apparel, and accessories for men, women, and kids in the United States. The company offers athletic shoes, as well as an assortment of apparel and accessories of Nike, Brand Jordan, adidas, Under Armour, Puma, and other brands. It engages in the in-store and online retail of athletic shoes for Macy's Retail Holdings, Inc.; Macy's Puerto Rico, Inc.; and Macys.com, Inc., as well as online at macys.com. As of April 2, 2017, the company operated 573 Finish Line stores in 44 states in the United States and Puerto Rico. It also operates e-commerce site, finishline.com and mobile commerce site, m.finishline.com. The company was founded in 1976 and is based in Indianapolis, Indiana.

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