GAP (NYSE:GAP) & Destination XL Group (NASDAQ:DXLG) Head-To-Head Analysis

GAP (NYSE:GAP) and Destination XL Group (NASDAQ:DXLG) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, valuation, dividends and risk.

Risk and Volatility

GAP has a beta of 2.35, suggesting that its share price is 135% more volatile than the S&P 500. Comparatively, Destination XL Group has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500.

Profitability

This table compares GAP and Destination XL Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GAP	5.05%	28.89%	6.92%
Destination XL Group	3.11%	11.10%	4.54%

Institutional and Insider Ownership

73.5% of Destination XL Group shares are owned by institutional investors. 12.4% of Destination XL Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares GAP and Destination XL Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GAP	$15.17 billion	0.53	$502.00 million	($27.20)	-0.79
Destination XL Group	$496.64 million	0.34	$27.85 million	$0.38	7.68

GAP has higher revenue and earnings than Destination XL Group. GAP is trading at a lower price-to-earnings ratio than Destination XL Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and target prices for GAP and Destination XL Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAP	0	3	0	0	2.00
Destination XL Group	0	1	1	0	2.50

GAP presently has a consensus price target of $27.00, suggesting a potential upside of 26.05%. Destination XL Group has a consensus price target of $3.50, suggesting a potential upside of 19.86%. Given GAP’s higher possible upside, analysts plainly believe GAP is more favorable than Destination XL Group.

Summary

GAP beats Destination XL Group on 8 of the 14 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 Destination XL Group

Destination XL Group, Inc., together with its subsidiaries, operates as a specialty retailer of big and tall men's clothing and shoes in the United States. The company's stores offer sportswear and dresswear; fashion-neutral items, including jeans, casual pants, T-shirts, polo shirts, dress shirts, and suit separates; and casual clothing. It also provides vintage-screen T-shirts and wovens under various private labels. The company offers its products under the trade names of Destination XL, DXL, DXL Men's Apparel, DXL outlets, Casual Male XL, and Casual Male XL outlets. The company was formerly known as Casual Male Retail Group, Inc. and changed its name to Destination XL Group, Inc. in February 2013. Destination XL Group, Inc. was incorporated in 1976 and is headquartered in Canton, Massachusetts.