Critical Survey: Stein Mart (OTCMKTS:SMRTQ) vs. GAP (NYSE:GAP)

GAP (NYSE:GAP) and Stein Mart (OTCMKTS:SMRTQ) are both retail/wholesale companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, valuation, earnings and dividends.

Institutional & Insider Ownership

58.8% of GAP shares are owned by institutional investors. 31.0% of GAP shares are owned by company insiders. Comparatively, 39.4% of Stein Mart shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares GAP and Stein Mart”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GAP	$15.24 billion	0.61	$502.00 million	$2.16	11.50
Stein Mart	N/A	N/A	N/A	N/A	N/A

GAP has higher revenue and earnings than Stein Mart.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
GAP	5.40%	29.03%	7.26%
Stein Mart	N/A	N/A	N/A

Analyst Recommendations

This is a summary of current ratings for GAP and Stein Mart, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAP	1	4	6	0	2.45
Stein Mart	0	0	0	0	0.00

GAP currently has a consensus target price of $28.50, suggesting a potential upside of 14.73%. Given GAP’s stronger consensus rating and higher probable upside, equities analysts plainly believe GAP is more favorable than Stein Mart.

Summary

GAP beats Stein Mart on 8 of the 9 factors compared between the two stocks.

About GAP

The Gap, Inc. operates as an apparel retail company. The company offers apparel, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, and Athleta brands. Its products include adult apparel and accessories; and fitness and lifestyle products for use in yoga, training, sports, travel, and everyday activities for women and girls. The company offers its products through company-operated stores, franchise stores, websites, and third-party arrangements. It has franchise agreements to operate Old Navy, Gap, Banana Republic, and Athleta stores and websites in Asia, Europe, Latin America, the Middle East, and Africa. The Gap, Inc. was incorporated in 1969 and is headquartered in San Francisco, California.

About Stein Mart

Stein Mart, Inc., a specialty omnichannel off-price retailer, offers designer and name-brand fashion apparels, home décor merchandise, accessories, and shoes at everyday discount prices in the United States. The company's stores also provides endless aisle, a mobile technology to locate products; a SMart Rewards loyalty program; co-branded and private label credit card programs; and electronic gift cards. As of June 3, 2020, it operated 281 stores in 30 states. The company also sells its products through an online retail selling site. Stein Mart, Inc. was founded in 1908 and is headquartered in Jacksonville, Florida. On August 12, 2020, Stein Mart, Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Middle District of Florida.