Critical Review: Marks & Spencer (MAKSY) & Zumiez (ZUMZ)

Marks & Spencer (OTCMKTS: MAKSY) and Zumiez (NASDAQ:ZUMZ) are both retail/wholesale companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.

Valuation and Earnings

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This table compares Marks & Spencer and Zumiez’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Marks & Spencer $14.40 billion 0.45 $153.08 million $0.83 9.53
Zumiez $927.40 million 0.66 $26.80 million $1.10 21.91

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for Marks & Spencer and Zumiez, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Marks & Spencer 1 0 0 0 1.00
Zumiez 0 3 2 0 2.40

Zumiez has a consensus target price of $24.00, suggesting a potential downside of 0.41%. Given Zumiez’s stronger consensus rating and higher possible upside, analysts clearly believe Zumiez is more favorable than Marks & Spencer.

Insider & Institutional Ownership

0.1% of Marks & Spencer shares are owned by institutional investors. Comparatively, 71.7% of Zumiez shares are owned by institutional investors. 27.5% of Zumiez shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Marks & Spencer and Zumiez’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Marks & Spencer N/A N/A N/A
Zumiez 2.89% 8.38% 5.71%

Dividends

Marks & Spencer pays an annual dividend of $0.47 per share and has a dividend yield of 5.9%. Zumiez does not pay a dividend. Marks & Spencer pays out 56.6% of its earnings in the form of a dividend.

Volatility & Risk

Marks & Spencer has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500. Comparatively, Zumiez has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Summary

Zumiez beats Marks & Spencer on 13 of the 16 factors compared between the two stocks.

Marks & Spencer Company Profile

Marks and Spencer Group plc operates various retail stores. It offers food products; and womenswear, menswear, kids wear, lingerie, and beauty and home products through its stores and online. The company operates 942 stores, including 253 owned and 383 franchise Simply Food stores; and 343 full-line stores and 41 outlet stores in the United Kingdom. It also operates 454 stores in Europe, Asia, and the Middle East. Marks and Spencer Group plc was founded in 1884 and is headquartered in London, the United Kingdom.

Zumiez Company Profile

Zumiez Inc., including its subsidiaries, is a specialty retailer of apparel, footwear, accessories and hardgoods for young men and women through the fashion, music, art and culture of action sports, streetwear and other lifestyles. The Company operates under the names Zumiez, Blue Tomato and Fast Times. Additionally, it operates e-commerce Websites at www.zumiez.com, www.blue-tomato.com and www.fasttimes.com.au. It offers various categories of shoes, such as skate shoes, casual shoes, high tops, sandals, slip ons, runners, boots and shoe accessories, such as socks. It also offers flannels, baseball tees, hoodies, baseball hats, windbreakers, shirts, jackets, jerseys, sweaters and tanks, among others. For women, it offers t-shirts, tank tops, hoodies and sweatshirts, cardigans, jackets, skirts, jeans, joggers, leggings and dresses, among others. It provides various accessories, including watches, sunglasses, bracelets, earrings, rings, beanies, hats, belts, wallets and phone accessories

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