Head-To-Head Review: Finish Line (FINL) versus Foot Locker (FL)

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

Valuation and Earnings

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This table compares Finish Line and Foot Locker’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Finish Line $1.84 billion 0.30 $14.41 million $0.69 19.64
Foot Locker $7.78 billion 0.64 $284.00 million $4.11 10.03

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

Profitability

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

Net Margins Return on Equity Return on Assets
Finish Line 0.78% 6.32% 3.95%
Foot Locker 3.65% 19.32% 13.49%

Analyst Recommendations

This is a summary of recent ratings for Finish Line and Foot Locker, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Finish Line 3 15 1 0 1.89
Foot Locker 1 10 16 0 2.56

Finish Line currently has a consensus price target of $11.34, indicating a potential downside of 16.29%. Foot Locker has a consensus price target of $54.70, indicating a potential upside of 32.74%. Given Foot Locker’s stronger consensus rating and higher possible upside, analysts clearly believe Foot Locker is more favorable than Finish Line.

Institutional and Insider Ownership

88.6% of Finish Line shares are held by institutional investors. Comparatively, 96.1% of Foot Locker shares are held by institutional investors. 6.0% of Finish Line shares are held by company insiders. Comparatively, 2.1% of Foot Locker shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Finish Line pays an annual dividend of $0.46 per share and has a dividend yield of 3.4%. Foot Locker pays an annual dividend of $1.38 per share and has a dividend yield of 3.3%. Finish Line pays out 66.7% of its earnings in the form of a dividend. Foot Locker pays out 33.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Foot Locker has raised its dividend for 7 consecutive years.

Risk & Volatility

Finish Line has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, Foot Locker has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500.

Summary

Foot Locker beats Finish Line on 13 of the 17 factors compared between the two stocks.

Finish Line Company Profile

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.

Foot Locker Company Profile

Foot Locker, Inc., through its subsidiaries, operates as an athletic shoes and apparel retailer. The company operates in two segments, Athletic Stores and Direct-to-Customers. The Athletic Stores segment retails athletic footwear, apparel, accessories, and equipment under various formats, including Foot Locker, Kids Foot Locker, Lady Foot Locker, Champs Sports, Footaction, Runners Point, Sidestep, and SIX:02. The Direct-to-Customers segment sells athletic footwear, apparel, equipment, and team licensed merchandise for high school and other athletes through Internet and mobile sites, and catalogs. This segment operates sites for eastbay.com, final-score.com, and eastbayteamsales.com, as well as footlocker.com, ladyfootlocker.com, six02.com, kidsfootlocker.com, champssports.com, footaction.com, footlocker.ca, footlocker.eu, footlocker.au, runnerspoint.com, and sidestep-shoes.com. As of February 3, 2018, the company operated 3,310 stores in 24 countries in North America, Europe, Australia, and New Zealand, as well as 98 franchised Foot Locker stores in the Middle East and 14 franchised Runners Point stores in Germany. Foot Locker, Inc. was founded in 1879 and is headquartered in New York, New York.

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