Contrasting GAP (NYSE:GPS) and FBC (OTCMKTS:FBCD)

FBC (OTCMKTS:FBCD) and GAP (NYSE:GPS) are both consumer cyclical companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, institutional ownership, profitability, valuation, analyst recommendations, risk and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for FBC and GAP, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FBC	0	0	0	0	N/A
GAP	0	7	8	0	2.53

GAP has a consensus price target of $27.08, indicating a potential upside of 10.31%. Given GAP’s higher probable upside, analysts plainly believe GAP is more favorable than FBC.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FBC	N/A	N/A	N/A	-0.20	0.00
GAP	$15.00 billion	0.61	$502.00 million	$1.80	13.64

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
FBC	N/A	N/A	N/A
GAP	4.52%	27.57%	6.30%

Institutional and Insider Ownership

8.6% of FBC shares are owned by institutional investors. Comparatively, 58.8% of GAP shares are owned by institutional investors. 68.4% of FBC shares are owned by insiders. Comparatively, 30.8% of GAP shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

GAP beats FBC on 9 of the 10 factors compared between the two stocks.

About FBC

FBC Holding, Inc. markets and sells streetwear clothing, headwear, and accessories for high school students in the United States. It offers shirts, jackets, hoodies, crewnecks, sweatpants, hats, and beanies under the FormRunner Apparel brand name. The company sells its product through 2 retail locations located in Scottsdale, Arizona, as well as through the online store FormRunnerApparel.com. FBC Holding, Inc. is based in Scottsdale, Arizona.

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.