Analyzing Canada Goose (NYSE:GOOS) & Cato (NYSE:CATO)

Canada Goose (NYSE:GOOS) and Cato (NYSE:CATO) are both small-cap retail/wholesale companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Profitability

This table compares Canada Goose and Cato’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Canada Goose	1.35%	13.89%	4.28%
Cato	-0.90%	-3.57%	-1.35%

Volatility and Risk

Canada Goose has a beta of 1.77, suggesting that its share price is 77% more volatile than the S&P 500. Comparatively, Cato has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500.

Institutional and Insider Ownership

83.6% of Canada Goose shares are owned by institutional investors. Comparatively, 61.1% of Cato shares are owned by institutional investors. 0.5% of Canada Goose shares are owned by insiders. Comparatively, 18.1% of Cato shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Canada Goose and Cato”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canada Goose	$969.08 million	1.20	$68.13 million	$0.13	91.72
Cato	$653.81 million	0.09	-$5.91 million	($0.31)	-9.18

Canada Goose has higher revenue and earnings than Cato. Cato is trading at a lower price-to-earnings ratio than Canada Goose, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Canada Goose and Cato, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canada Goose	3	4	2	0	1.89
Cato	1	0	0	0	1.00

Canada Goose currently has a consensus target price of $15.17, indicating a potential upside of 27.21%. Given Canada Goose’s stronger consensus rating and higher probable upside, research analysts clearly believe Canada Goose is more favorable than Cato.

Summary

Canada Goose beats Cato on 13 of the 14 factors compared between the two stocks.

About Canada Goose

Canada Goose Holdings Inc., together with its subsidiaries, designs, manufactures, and sells performance luxury apparel for men, women, youth, children, and babies in Canada, the United States, Asia Pacific, Europe, the Middle East, and Africa. The company operates through three segments: Direct-to-Consumer, Wholesale, and Other. It offers parkas, lightweight down jackets, rainwear, windwear, apparel, fleece, footwear, and accessories for fall, winter, and spring seasons. The company operates through national e-commerce markets and directly operated retail stores. Canada Goose Holdings Inc. was founded in 1957 and is headquartered in Toronto, Canada.

About Cato

The Cato Corporation, together with its subsidiaries, operates as a specialty retailer of fashion apparel and accessories primarily in the southeastern United States. It operates through two segments, Retail and Credit. The company's stores and e-commerce websites offer a range of apparel and accessories, including dressy, career, and casual sportswear; and dresses, coats, shoes, lingerie, costume jewelry, and handbags, as well as men's wear, and lines for kids and infants. It operates its stores and e-commerce websites under the Cato, Cato Fashions, Cato Plus, It's Fashion, It's Fashion Metro, and Versona names. It also provides credit card services to its customers, as well as layaway plans for customers. The Cato Corporation was incorporated in 1946 and is headquartered in Charlotte, North Carolina.