Reviewing Stein Mart (SMRT) & Tilly's (TLYS)

Stein Mart (NASDAQ: SMRT) and Tilly's (NYSE:TLYS) are both small-cap retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitabiliy and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings for Stein Mart and Tilly's, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stein Mart 0 3 0 0 2.00
Tilly's 0 3 3 0 2.50

Stein Mart currently has a consensus price target of $7.50, indicating a potential upside of 365.84%. Tilly's has a consensus price target of $10.83, indicating a potential upside of 12.26%. Given Stein Mart’s higher possible upside, research analysts clearly believe Stein Mart is more favorable than Tilly's.

Dividends

Stein Mart pays an annual dividend of $0.30 per share and has a dividend yield of 18.6%. Tilly's does not pay a dividend. Stein Mart pays out -142.9% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Stein Mart and Tilly's’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Stein Mart $1.34 billion 0.06 $27.67 million ($0.21) -7.67
Tilly's $569.68 million 0.49 $47.93 million $0.48 20.10

Tilly's has higher revenue, but lower earnings than Stein Mart. Stein Mart is trading at a lower price-to-earnings ratio than Tilly's, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Stein Mart has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, Tilly's has a beta of -0.43, meaning that its share price is 143% less volatile than the S&P 500.

Profitability

This table compares Stein Mart and Tilly's’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stein Mart -0.69% -10.71% -1.49%
Tilly's -0.13% -0.36% -0.23%

Institutional & Insider Ownership

42.3% of Stein Mart shares are owned by institutional investors. Comparatively, 41.8% of Tilly's shares are owned by institutional investors. 34.7% of Stein Mart shares are owned by insiders. Comparatively, 53.4% of Tilly's shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Tilly's beats Stein Mart on 9 of the 15 factors compared between the two stocks.

About Stein Mart

Stein Mart, Inc. is a national retailer offering the fashion merchandise, service and presentation of a department or specialty store. The Company offers apparel for women and men, as well as accessories, shoes and home fashions. The Company’s target customers are women over 45 years old. The Company operates approximately 280 stores in over 30 states and an Internet store. Its stores are located in the Northeast, Midwest, Southeast, Texas and the Southwest. It is concentrated in the Southeast and Texas where over 180 of its stores are located. The Company’s stores offer a range of services, such as merchandise locator service, a Preferred Customer program, co-branded and private label credit card programs, and electronic gift cards. The Company’s merchants purchase products from approximately 1,200 vendors. It leases all of its store locations, generally for approximately 10 years with options to extend the lease term for over two or five year periods.

About Tilly's

Tilly’s, Inc. is a destination specialty retailer of casual apparel, footwear and accessories for young men, young women, boys and girls. The Company offers an unparalleled selection of relevant brands, styles, colors, sizes and price points. The Company’s apparel merchandise includes branded, fashion and styles for tops, outerwear, bottoms and dresses. Its accessories merchandise includes backpacks, hats, sunglasses, headphones, handbags, watches, jewelry and others. The Company offers its products through stores and Website. The Company operates over 220 stores in approximately 30 states. The Company’s stores are located in malls, lifestyle centers, power centers, community centers, outlet centers and street-front locations. The Company also operates an e-commerce platform for desktop and mobile. The Company’s third-party brands include AYC, Adidas, Billabong, Converse, Hurley, Nixon, JanSport, LRG and Stance, among others.

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