Comparing GAP (NYSE:GAP) & Destination XL Group (NASDAQ:DXLG)

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

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Destination XL Group	$496.64 million	0.34	$27.85 million	$0.38	7.58
GAP	$15.17 billion	0.53	$502.00 million	($27.20)	-0.78

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.

Risk & Volatility

Destination XL Group has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500. Comparatively, GAP has a beta of 2.35, suggesting that its share price is 135% more volatile than the S&P 500.

Profitability

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

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

Analyst Recommendations

This is a summary of recent ratings for Destination XL Group and GAP, as provided by MarketBeat.com.

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

Destination XL Group presently has a consensus target price of $3.50, suggesting a potential upside of 21.53%. GAP has a consensus target price of $27.00, suggesting a potential upside of 27.06%. Given GAP’s higher possible upside, analysts clearly believe GAP is more favorable than Destination XL Group.

Insider & Institutional 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 large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

GAP beats Destination XL Group on 8 of the 14 factors compared between the two stocks.

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.

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.