Financial Review: Christopher & Banks (CBK) and L Brands (LB)

Christopher & Banks (NYSE: CBK) and L Brands (NYSE:LB) are both retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, dividends, profitability and risk.

Profitability

This table compares Christopher & Banks and L Brands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Christopher & Banks -6.51% -42.06% -18.58%
L Brands 7.30% -93.09% 11.09%

Insider and Institutional Ownership

37.5% of Christopher & Banks shares are owned by institutional investors. Comparatively, 75.1% of L Brands shares are owned by institutional investors. 16.9% of Christopher & Banks shares are owned by insiders. Comparatively, 17.3% of L Brands shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Christopher & Banks has a beta of 3.19, indicating that its share price is 219% more volatile than the S&P 500. Comparatively, L Brands has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Christopher & Banks and L Brands, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Christopher & Banks 0 0 0 0 N/A
L Brands 4 16 12 0 2.25

L Brands has a consensus price target of $43.80, indicating a potential upside of 21.69%. Given L Brands’ higher probable upside, analysts clearly believe L Brands is more favorable than Christopher & Banks.

Dividends

L Brands pays an annual dividend of $2.40 per share and has a dividend yield of 6.7%. Christopher & Banks does not pay a dividend. L Brands pays out 75.0% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Christopher & Banks and L Brands’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Christopher & Banks $365.91 million 0.09 -$22.02 million ($0.58) -1.52
L Brands $12.63 billion 0.79 $983.00 million $3.20 11.25

L Brands has higher revenue and earnings than Christopher & Banks. Christopher & Banks is trading at a lower price-to-earnings ratio than L Brands, indicating that it is currently the more affordable of the two stocks.

Summary

L Brands beats Christopher & Banks on 12 of the 15 factors compared between the two stocks.

Christopher & Banks Company Profile

Christopher & Banks Corporation, through its subsidiaries, operates as a specialty retailer of private-brand women's apparel and accessories in the United States. The company designs and sells women's apparel and accessories to customers ranging in age from 40 and older. Its stores offer women's apparel consisting of casual clothing, everyday basics, wear-to-work, leisure/active wear, and sleepwear in missy, petite, and women sizes, as well as jewelry and accessories. As of February 3, 2018, the company operated 463 stores, including 78 Outlet stores, 37 Christopher & Banks stores, and 34 C.J. Banks stores, as well as 314 Missy, Petite, Women stores in 45 states. It also operates christopherandbanks.com, an e-commerce Website for its Christopher & Banks and C.J. Banks brands. The company was formerly known as Braun's Fashions Corporation and changed its name to Christopher & Banks Corporation in July 2000. Christopher & Banks Corporation was founded in 1956 and is headquartered in Plymouth, Minnesota.

L Brands Company Profile

L Brands, Inc. operates as a specialty retailer of women's intimate and other apparel, beauty and personal care products, home fragrance products, and accessories. The company operates in three segments: Victoria's Secret, Bath & Body Works, and Victoria's Secret and Bath & Body Works International. Its products include loungewear, bras, panties, athletic attire, shower gels and lotions, aromatherapy, body care, soaps and sanitizers, handbags, jewelry, and personal care accessories. The company offers its products under the Victoria's Secret, PINK, Bath & Body Works, La Senza, Henri Bendel, C.O. Bigelow, White Barn, and other brand names. L Brands, Inc. sells its merchandise through company-owned specialty retail stores, which are primarily mall-based; through its Websites comprising VictoriasSecret.com, BathandBodyWorks.com, HenriBendel.com, and LaSenza.com; and through franchises, licenses, and wholesale partners. As of March 8, 2018, the company operated 3,071 company-owned specialty stores in the United States, Canada, the United Kingdom, Ireland, and Greater China, as well as sold its brands through approximately 800 franchised locations worldwide. The company was formerly known as Limited Brands, Inc. and changed its name to L Brands, Inc. in March 2013. L Brands, Inc. was founded in 1963 and is headquartered in Columbus, Ohio.

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