Contrasting Vera Bradley (NASDAQ:VRA) and Tandy Leather Factory (OTCMKTS:TLFA)

Vera Bradley (NASDAQ:VRA) and Tandy Leather Factory (OTCMKTS:TLFA) are both small-cap retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, earnings, institutional ownership, dividends, valuation, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Vera Bradley and Tandy Leather Factory, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vera Bradley 0 1 1 0 2.50
Tandy Leather Factory 0 0 0 0 N/A

Vera Bradley presently has a consensus target price of $10.50, indicating a potential upside of 16.41%. Given Vera Bradley’s higher probable upside, analysts plainly believe Vera Bradley is more favorable than Tandy Leather Factory.

Profitability

This table compares Vera Bradley and Tandy Leather Factory’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vera Bradley 0.92% 7.43% 4.01%
Tandy Leather Factory N/A N/A N/A

Volatility and Risk

Vera Bradley has a beta of 1.6, indicating that its share price is 60% more volatile than the S&P 500. Comparatively, Tandy Leather Factory has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Earnings and Valuation

This table compares Vera Bradley and Tandy Leather Factory’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Vera Bradley $495.21 million 0.61 $16.05 million $0.82 11.00
Tandy Leather Factory $83.10 million 0.34 $1.96 million N/A N/A

Vera Bradley has higher revenue and earnings than Tandy Leather Factory.

Insider and Institutional Ownership

58.0% of Vera Bradley shares are held by institutional investors. Comparatively, 43.8% of Tandy Leather Factory shares are held by institutional investors. 27.2% of Vera Bradley shares are held by company insiders. Comparatively, 42.2% of Tandy Leather Factory shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Vera Bradley beats Tandy Leather Factory on 10 of the 11 factors compared between the two stocks.

About Vera Bradley

Vera Bradley, Inc., together with its subsidiaries, designs, manufactures, and sells women's handbags, luggage and travel items, fashion and home accessories, and gifts. It operates through three segments: Vera Bradley Direct, Vera Bradley Indirect, and Pura Vida. The company offers bag products, such as totes, crossbodies, satchels, clutches, backpacks, baby bags, and lunch bags; accessories, including wallets, wristlets, eyeglass cases, scarves, and various technology accessories; bracelets, rings, and necklaces under Pura Vida brand name; and travel products consisting of rolling luggage, cosmetics, and travel and packing accessories, as well as travel bags comprising duffel and weekend bags. It also provides home products that include throw blankets, beach towels, and comforters, as well as items, such as mugs and tumblers; and other products, including apparel/footwear, stationery, and merchandising products, as well as freight, licensing, and gift card breakage services. The company sells its Vera Bradley branded products through its full-line and factory outlet stores in the United States; and verabradley.com, an online outlet site, as well as its annual outlet sale in Fort Wayne, Indiana. As of February 1, 2020, it operated 88 full-line and 63 factory outlet stores. The company sells its Pura Vida branded products through wholesale retailers, as well as through Pura Vida websites, including www.puravidabracelets.com and www.puravidabracelets.eu. It also sells its Vera Bradley branded products to approximately 2,200 specialty retail locations, department stores, national accounts, third party e-commerce sites, and third-party inventory liquidators, as well as through licensing agreements. Vera Bradley, Inc. was founded in 1982 and is headquartered in Roanoke, Indiana.

About Tandy Leather Factory

Tandy Leather Factory, Inc. operates as a retailer and wholesale distributor of a range of leather and leathercraft related items in North America and internationally. The company offers leather, quality tools, hardware, small machines, accessories, liquids, lace, kits, open workbenches, and teaching materials. It also manufactures leather lace and do-it-yourself kits. The company sells its products through company-owned stores; and orders generated from its Website, tandyleather.com. As of March 6, 2019, the company had 115 North American stores located in 42 states of the United States and 7 Canadian provinces; and 2 stores located in the United Kingdom and Spain. It serves individual retail customers; and wholesale, manufacturer, and institutional groups, such as horse and tack shops, Western wear, crafters, upholsterers, cobblers, auto repair, education, hospitals, prisons, and other businesses that use its products as raw materials to produce goods for resale. The company was formerly known as The Leather Factory, Inc. and changed its name to Tandy Leather Factory, Inc. in 2005. Tandy Leather Factory, Inc. was founded in 1980 and is headquartered in Fort Worth, Texas.

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