Analyzing Hennes & Mauritz (OTCMKTS:HNNMY) & Citi Trends (NASDAQ:CTRN)

Citi Trends (NASDAQ:CTRN) and Hennes & Mauritz (OTCMKTS:HNNMY) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Risk & Volatility

Citi Trends has a beta of 1.93, meaning that its stock price is 93% more volatile than the S&P 500. Comparatively, Hennes & Mauritz has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Citi Trends and Hennes & Mauritz, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citi Trends	0	1	2	0	2.67
Hennes & Mauritz	2	4	0	1	2.00

Citi Trends presently has a consensus price target of $68.00, indicating a potential upside of 55.64%. Given Citi Trends’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Citi Trends is more favorable than Hennes & Mauritz.

Earnings and Valuation

This table compares Citi Trends and Hennes & Mauritz”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citi Trends	$819.96 million	0.44	$5.21 million	$0.59	74.05
Hennes & Mauritz	$23.01 billion	1.05	$1.23 billion	$0.16	21.38

Hennes & Mauritz has higher revenue and earnings than Citi Trends. Hennes & Mauritz 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 Hennes & Mauritz’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Citi Trends	0.64%	-4.78%	-1.16%
Hennes & Mauritz	5.48%	30.79%	7.32%

Institutional and Insider Ownership

0.0% of Hennes & Mauritz shares are owned by institutional investors. 9.6% of Citi Trends shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Hennes & Mauritz beats Citi Trends on 8 of the 15 factors compared between the two stocks.

About Citi Trends

Citi Trends, Inc. operates as a value retailer of fashion apparel, accessories, and home goods. The company offers apparel, such as fashion sportswear and footwear for men and ladies, as well as apparel for kids, including newborns, infants, toddlers, boys, and girls; sleepwear, lingerie, and scrubs for ladies; and kids uniforms and accessories. It also provides accessories and beauty products that include handbags, luggage, hats, belts, sunglasses, jewelry, and watches, as well as offers outerwear for men and women. In addition, the company offers home and lifestyle products comprising home products for the bedroom, bathroom, kitchen, and decorative accessories; and food, tech, team sports, health and products, as well as seasonal items, books, and toys. Citi Trends, Inc. provides its products primarily to African American and multicultural families in the United States. The company was formerly known as Allied Fashion, Inc. and changed its name to Citi Trends, Inc. in 2001. Citi Trends, Inc. was founded in 1946 and is headquartered in Savannah, Georgia.

About Hennes & Mauritz

H & M Hennes & Mauritz AB (publ) provides clothing, accessories, footwear, cosmetics, home textiles, and homeware for women, men, and children worldwide. It offers sportswear, shoes, bags, beauty products, activewear, jeans, and ready-to-wear; and interior products, including bed linens, dinnerware, textiles, furniture, and lighting. The company provides its products under the H&M, H&M HOME, H&M Move, H&M Beauty, COS, Weekday, Monki, & Other Stories, ARKET, Afound, and Singular Society brand names. In addition, it operates Sellpy, a broad digital platform for second-hand fashion and other products; and Creator Studio, a global platform for merchandise design and production, as well as provides solutions to extend the useful life of unwanted garments through reuse and recycling under Looper Textile name. The company offers its products through online and physical stores. H & M Hennes & Mauritz AB (publ) was incorporated in 1943 and is headquartered in Stockholm, Sweden.