Head-To-Head Review: Lovesac (NASDAQ:LOVE) and Signet Jewelers (NYSE:SIG)

Signet Jewelers (NYSE:SIG) and Lovesac (NASDAQ:LOVE) are both consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, risk, analyst recommendations and profitability.

Institutional & Insider Ownership

91.3% of Lovesac shares are owned by institutional investors. 1.2% of Signet Jewelers shares are owned by company insiders. Comparatively, 7.8% of Lovesac shares are owned by company 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.

Analyst Ratings

This is a breakdown of recent ratings for Signet Jewelers and Lovesac, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Signet Jewelers	0	5	6	1	2.67
Lovesac	0	1	3	0	2.75

Signet Jewelers presently has a consensus price target of $125.56, suggesting a potential upside of 6.91%. Lovesac has a consensus price target of $21.33, suggesting a potential upside of 37.72%. Given Lovesac’s stronger consensus rating and higher probable upside, analysts clearly believe Lovesac is more favorable than Signet Jewelers.

Profitability

This table compares Signet Jewelers and Lovesac’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Signet Jewelers	5.19%	23.28%	7.61%
Lovesac	2.56%	2.57%	1.02%

Earnings & Valuation

This table compares Signet Jewelers and Lovesac”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Signet Jewelers	$6.81 billion	0.66	$294.40 million	$8.68	13.53
Lovesac	$697.65 million	0.32	$4.07 million	$1.22	12.70

Signet Jewelers has higher revenue and earnings than Lovesac. Lovesac is trading at a lower price-to-earnings ratio than Signet Jewelers, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Signet Jewelers has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, Lovesac has a beta of 2.17, meaning that its share price is 117% more volatile than the S&P 500.

Summary

Signet Jewelers beats Lovesac on 10 of the 15 factors compared between the two stocks.

About Signet Jewelers

Signet Jewelers Limited operates as a diamond jewelry retailer. It operates through three segments: North America, International, and Other. The North America segment operates jewelry stores in jewelry stores in malls, mall-based kiosks, and off-mall locations in the United States and Canada primarily under the Kay Jewelers, Kay Jewelers Outlet, Jared The Galleria Of Jewelry, Jared Vault, Zales Outlet, Zales Jewelers, Diamonds Direct, James Allen, Banter by Piercing Pagoda, and Peoples Jewellers names, as well as operates online through its digital banners, James Allen and Blue Nile. This segment also engages in jewelry subscription business. The International segment operates stores in shopping malls and off-mall locations primarily under the H.Samuel and Ernest Jones brands in the United Kingdom, Republic of Ireland, and Channel Islands. The Other segment is involved in the purchase and conversion of rough diamonds to polished stones, as well as the provision of diamond polishing services. Signet Jewelers Limited is based in Hamilton, Bermuda.

About Lovesac

The Lovesac Company designs, manufactures, and sells furniture. It offers sactionals, such as seats and sides; sacs, including foam beanbag chairs; and other products comprising drink holders, footsac blankets, decorative pillows, fitted seat tables, and ottomans. The company markets its products primarily through www.lovesac.com website, as well as showrooms at top tier malls, lifestyle centers, mobile concierges, kiosks, and street locations in 41 states in the United States; and in store pop-up- shops and shop-in-shops, and barter inventory transactions. The Lovesac Company was founded in 1995 and is based in Stamford, Connecticut.