Tilly’s (NYSE:TLYS) and DICK’S Sporting Goods (NYSE:DKS) Critical Analysis

DICK’S Sporting Goods (NYSE:DKS) and Tilly’s (NYSE:TLYS) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Insider & Institutional Ownership

89.8% of DICK’S Sporting Goods shares are held by institutional investors. Comparatively, 76.4% of Tilly’s shares are held by institutional investors. 28.9% of DICK’S Sporting Goods shares are held by insiders. Comparatively, 26.4% of Tilly’s shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations and price targets for DICK’S Sporting Goods and Tilly’s, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DICK’S Sporting Goods	3	9	11	0	2.35
Tilly’s	0	2	0	1	2.67

DICK’S Sporting Goods currently has a consensus price target of $167.20, suggesting a potential upside of 25.61%. Tilly’s has a consensus price target of $5.50, suggesting a potential upside of 29.99%. Given Tilly’s’ stronger consensus rating and higher possible upside, analysts plainly believe Tilly’s is more favorable than DICK’S Sporting Goods.

Risk & Volatility

DICK’S Sporting Goods has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500. Comparatively, Tilly’s has a beta of 0.13, indicating that its stock price is 87% less volatile than the S&P 500.

Valuation and Earnings

This table compares DICK’S Sporting Goods and Tilly’s”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DICK’S Sporting Goods	$17.22 billion	0.69	$849.24 million	$9.31	14.30
Tilly’s	$582.94 million	0.22	-$17.45 million	$0.06	70.52

DICK’S Sporting Goods has higher revenue and earnings than Tilly’s. DICK’S Sporting Goods is trading at a lower price-to-earnings ratio than Tilly’s, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares DICK’S Sporting Goods and Tilly’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DICK’S Sporting Goods	3.97%	19.21%	6.07%
Tilly’s	0.34%	2.37%	0.61%

Summary

DICK’S Sporting Goods beats Tilly’s on 11 of the 15 factors compared between the two stocks.

About DICK’S Sporting Goods

DICK’s Sporting Goods, Inc. engages in the retailing of an extensive assortment of authentic sports equipment, apparel, footwear, and accessories. It also offers its products both online and through mobile applications. The company was founded by Richard T. Stack in 1948 and is headquartered in Coraopolis, PA.

About Tilly’s

Tilly’s, Inc. engages in the retail of casual apparel, footwear, and accessories. Its stores are located in retail centers, including malls, lifestyle centers, power centers, community centers, outlet centers, and street-front locations. The company was founded by Hezy Shaked and Tilly Levine in 1982 and is headquartered in Irvine, CA.