Head to Head Contrast: Levi Strauss & Co. (NYSE:LEVI) & Cato (NYSE:CATO)

Levi Strauss & Co. (NYSE:LEVI) and Cato (NYSE:CATO) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, valuation, dividends and risk.

Risk and Volatility

Levi Strauss & Co. has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500. Comparatively, Cato has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.

Profitability

This table compares Levi Strauss & Co. and Cato’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Levi Strauss & Co.	6.40%	28.75%	9.03%
Cato	-4.02%	-14.71%	-5.80%

Institutional and Insider Ownership

69.1% of Levi Strauss & Co. shares are owned by institutional investors. Comparatively, 61.1% of Cato shares are owned by institutional investors. 1.3% of Levi Strauss & Co. shares are owned by insiders. Comparatively, 16.6% of Cato shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Levi Strauss & Co. and Cato”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Levi Strauss & Co.	$6.36 billion	1.31	$210.60 million	$1.02	20.67
Cato	$649.81 million	0.09	-$18.06 million	($1.35)	-2.11

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

Analyst Ratings

This is a summary of current ratings and target prices for Levi Strauss & Co. and Cato, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Levi Strauss & Co.	0	2	9	0	2.82
Cato	0	0	0	0	0.00

Levi Strauss & Co. presently has a consensus price target of $23.4545, suggesting a potential upside of 11.26%. Given Levi Strauss & Co.’s stronger consensus rating and higher possible upside, analysts plainly believe Levi Strauss & Co. is more favorable than Cato.

Summary

Levi Strauss & Co. beats Cato on 13 of the 14 factors compared between the two stocks.

About Levi Strauss & Co.

Levi Strauss & Co. engages in the design, marketing, and sale of apparel products. The company offers jeans, casual and dress pants, tops, shorts, skirts, jackets, footwear, and related accessories. It operates through the following geographical segments: Americas, Europe, and Asia. The company was founded by Levi Strauss in 1853 and is headquartered in San Francisco, CA.

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.