Citi Trends (NASDAQ: CTRN) and Kate Spade & Co (NYSE:KATE) are both retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.

Dividends

Citi Trends pays an annual dividend of $0.32 per share and has a dividend yield of 1.8%. Kate Spade & Co does not pay a dividend. Citi Trends pays out 35.2% of its earnings in the form of a dividend.

Volatility and Risk

Citi Trends has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500. Comparatively, Kate Spade & Co has a beta of 1.75, indicating that its stock price is 75% more volatile than the S&P 500.

Valuation & Earnings

This table compares Citi Trends and Kate Spade & Co’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Citi Trends $712.38 million 0.36 $35.77 million $0.91 19.87
Kate Spade & Co N/A N/A N/A $1.11 16.66

Citi Trends has higher revenue and earnings than Kate Spade & Co. Kate Spade & Co is trading at a lower price-to-earnings ratio than Citi Trends, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Citi Trends and Kate Spade & Co’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Citi Trends 1.88% 6.78% 4.62%
Kate Spade & Co 0.44% 1.11% 0.43%

Analyst Ratings

This is a breakdown of current recommendations for Citi Trends and Kate Spade & Co, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Citi Trends 0 0 0 0 N/A
Kate Spade & Co 1 13 1 0 2.00

Kate Spade & Co has a consensus target price of $20.04, indicating a potential upside of 8.39%. Given Kate Spade & Co’s higher probable upside, analysts plainly believe Kate Spade & Co is more favorable than Citi Trends.

Insider and Institutional Ownership

91.0% of Citi Trends shares are held by institutional investors. Comparatively, 97.9% of Kate Spade & Co shares are held by institutional investors. 4.6% of Citi Trends shares are held by insiders. Comparatively, 0.8% of Kate Spade & Co shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Citi Trends Company Profile

Citi Trends, Inc. is a retailer of urban fashion apparel and accessories. The Company’s segment is retail operations. The Company operates approximately 520 stores in both urban and rural markets in over 30 states. The Company offers products under its brands, such as Citi Steps and Red Ape. The Company’s merchandise includes apparel, accessories and home. Within apparel, the Company offers fashion sportswear for men, women and children, including offerings for newborns, infants, toddlers, boys and girls. Accessories include handbags, jewelry, footwear, belts, intimate apparel, scrubs and sleepwear. The Company’s home merchandise includes decorative home product, functional home product, beauty, books, toys and electronic accessories. The Company sources its merchandise from approximately 1,700 vendors, consisting of domestic manufacturers and importers.

Kate Spade & Co Company Profile

Kate Spade & Company is engaged in the design and marketing of a range of accessories and apparel. It operates through three segments. The KATE SPADE North America segment consists of the Company’s kate spade new york and JACK SPADE brands in North America. The KATE SPADE International segment consists of the Company’s kate spade new york and JACK SPADE brands in international markets, which operates principally in Japan, Asia (excluding Japan), Europe and Latin America). The Adelington Design Group segment primarily consists of exclusive arrangements to supply jewelry for the LIZ CLAIBORNE and MONET brands. In addition, the Adelington Design Group segment serves J.C. Penney Corporation, Inc. (JCPenney) through exclusive supplier agreements for the LIZ CLAIBORNE and MONET jewelry lines. As of December 31, 2016, it operated 98 the United States Specialty Retail Stores; 35 Foreign Specialty Retail Stores; 65 the United States Outlet Stores; 17 Foreign Outlet Stores, and 54 Concessions.

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