Head to Head Comparison: L Brands (NYSE:LTD) and Foot Locker (FL)

L Brands (NYSE: LTD) and Foot Locker (NYSE:FL) are both cyclical consumer goods & services companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, dividends, valuation, profitabiliy and analyst recommendations.

Insider and Institutional Ownership

93.7% of Foot Locker shares are held by institutional investors. 1.7% of Foot Locker shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Foot Locker pays an annual dividend of $1.24 per share and has a dividend yield of 2.6%. L Brands does not pay a dividend. Foot Locker pays out 25.4% of its earnings in the form of a dividend. Foot Locker has raised its dividend for 6 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
L Brands 3.86% N/A 4.70%
Foot Locker 8.39% 23.87% 16.90%

Valuation and Earnings

This table compares L Brands and Foot Locker’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
L Brands N/A N/A N/A N/A N/A
Foot Locker $7.78 billion 0.82 $1.13 billion $4.89 9.93

Foot Locker has higher revenue and earnings than L Brands.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for L Brands and Foot Locker, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
L Brands 0 0 0 0 N/A
Foot Locker 0 7 15 1 2.74

Foot Locker has a consensus target price of $74.09, indicating a potential upside of 52.64%. Given Foot Locker’s higher probable upside, analysts plainly believe Foot Locker is more favorable than L Brands.

Summary

Foot Locker beats L Brands on 11 of the 12 factors compared between the two stocks.

L Brands Company Profile

L Brands, Inc. operates specialty retail business. The Company is focused on women’s intimate and other apparel, personal care, beauty and home fragrance categories. Its segments include Victoria’s Secret, Bath & Body Works, and Victoria’s Secret and Bath & Body Works International. It sells its merchandise through company-owned specialty retail stores in the United States, Canada, the United Kingdom and Greater China, which are mall-based; through Websites, and through international franchise, license and wholesale partners. It operates in the retail brands, which include Victoria’s Secret, PINK, Bath & Body Works and La Senza. La Senza is a specialty retailer of women’s intimate apparel. It sells its La Senza products at over 120 La Senza stores in Canada. Henri Bendel sells handbags, jewelry and other accessory products through New York and 28 other stores. Mast Global is a merchandise sourcing and production function serving the Company and its international partners.

Foot Locker Company Profile

Foot Locker, Inc. is a retailer of shoes and apparel. The Company operates through two segments: Athletic Stores and Direct-to-Customers. The Company is an athletic footwear and apparel retailer, which include businesses, such as include Foot Locker, Kids Foot Locker, Lady Foot Locker, Champs Sports, Footaction, Runners Point, Sidestep and SIX:02. The Direct-to-Customers segment is multi-branded and sells directly to customers through Internet and mobile sites and catalogs. The Direct-to-Customers segment operates the Websites for eastbay.com, final-score.com, eastbayteamsales.com and sp24.com. Additionally, this segment includes the Websites, both desktop and mobile, aligned with the brand names of its store banners (footlocker.com, ladyfootlocker.com, six02.com kidsfootlocker.com, champssports.com, footaction.com, footlocker.ca, footlocker.eu, runnerspoint.com and sidestep-shoes.com).

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