Signet Jewelers (NYSE:SIG) & Citi Trends (NASDAQ:CTRN) Critical Review

Citi Trends (NASDAQ:CTRN) and Signet Jewelers (NYSE:SIG) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Citi Trends and Signet Jewelers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citi Trends	0	1	2	0	2.67
Signet Jewelers	0	7	5	0	2.42

Citi Trends currently has a consensus target price of $81.00, indicating a potential upside of 38.11%. Signet Jewelers has a consensus target price of $125.56, indicating a potential upside of 24.25%. Given Citi Trends’ stronger consensus rating and higher probable upside, research analysts plainly believe Citi Trends is more favorable than Signet Jewelers.

Volatility & Risk

Citi Trends has a beta of 1.82, suggesting that its stock price is 82% more volatile than the S&P 500. Comparatively, Signet Jewelers has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.

Profitability

This table compares Citi Trends and Signet Jewelers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Citi Trends	0.84%	8.11%	2.00%
Signet Jewelers	5.19%	23.28%	7.61%

Valuation and Earnings

This table compares Citi Trends and Signet Jewelers”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	0.60	$5.21 million	$0.82	71.52
Signet Jewelers	$6.81 billion	0.58	$294.40 million	$8.68	11.64

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

Summary

Signet Jewelers beats Citi Trends on 7 of the 12 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 Signet Jewelers

Signet Jewelers Limited operates as a diamond jewelry retailer. It operates through three segments: North America, International, and Other. The North America segment operates jewelry stores in jewelry stores in malls, mall-based kiosks, and off-mall locations in the United States and Canada primarily under the Kay Jewelers, Kay Jewelers Outlet, Jared The Galleria Of Jewelry, Jared Vault, Zales Outlet, Zales Jewelers, Diamonds Direct, James Allen, Banter by Piercing Pagoda, and Peoples Jewellers names, as well as operates online through its digital banners, James Allen and Blue Nile. This segment also engages in jewelry subscription business. The International segment operates stores in shopping malls and off-mall locations primarily under the H.Samuel and Ernest Jones brands in the United Kingdom, Republic of Ireland, and Channel Islands. The Other segment is involved in the purchase and conversion of rough diamonds to polished stones, as well as the provision of diamond polishing services. Signet Jewelers Limited is based in Hamilton, Bermuda.