Carter's (CRI) & Citi Trends (CTRN) Head-To-Head Analysis

Carter's (NYSE: CRI) and Citi Trends (NASDAQ:CTRN) are both cyclical consumer goods & services companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, valuation, institutional ownership, risk, earnings, dividends and profitability.

Profitability

This table compares Carter's and Citi Trends’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carter's 7.69% 33.38% 12.91%
Citi Trends 2.04% 7.70% 5.14%

Risk & Volatility

Carter's has a beta of 0.37, suggesting that its stock price is 63% less volatile than the S&P 500. Comparatively, Citi Trends has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Carter's and Citi Trends, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carter's 0 5 9 0 2.64
Citi Trends 0 0 0 0 N/A

Carter's presently has a consensus price target of $110.31, indicating a potential downside of 6.80%. Given Carter's’ higher possible upside, equities research analysts plainly believe Carter's is more favorable than Citi Trends.

Earnings and Valuation

This table compares Carter's and Citi Trends’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Carter's $3.20 billion 1.75 $258.10 million $5.19 22.80
Citi Trends $695.17 million 0.51 $13.33 million $1.01 25.32

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

Insider and Institutional Ownership

98.7% of Carter's shares are owned by institutional investors. Comparatively, 86.5% of Citi Trends shares are owned by institutional investors. 3.1% of Carter's shares are owned by company insiders. Comparatively, 4.6% of Citi Trends shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Carter's pays an annual dividend of $1.48 per share and has a dividend yield of 1.3%. Citi Trends pays an annual dividend of $0.32 per share and has a dividend yield of 1.3%. Carter's pays out 28.5% of its earnings in the form of a dividend. Citi Trends pays out 31.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Carter's has increased its dividend for 4 consecutive years.

Summary

Carter's beats Citi Trends on 12 of the 16 factors compared between the two stocks.

About Carter's

Carter’s, Inc. (Carter’s) is a marketer of apparel for babies and young children in the United States and Canada. The Company owns two brand names in the children’s apparel industry, Carter’s and OshKosh B’gosh (OshKosh). The Company operates through five segments: Carter’s Retail, Carter’s Wholesale, OshKosh Retail, OshKosh Wholesale and International. Its International segment includes company-operated retail stores and online Websites, wholesale operations, and royalty income from its international licensees. It markets products for consumers, and offer various product categories, including baby, sleepwear, play clothes, and related accessories. Its multi-channel international business model – retail stores, online and wholesale – enables it to reach a range of consumers around the world. As of December 31, 2016, its channels included approximately 18,000 wholesale locations, 792 stores in the United States, 164 stores in Canada, and its Canadian and the United States Websites.

About Citi Trends

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.

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