Critical Analysis: Burberry Group (OTCMKTS:BURBY) & Cato (NYSE:CATO)

Burberry Group (OTCMKTS:BURBY) and Cato (NYSE:CATO) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Profitability

This table compares Burberry Group and Cato’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Burberry Group	N/A	N/A	N/A
Cato	-1.38%	-5.46%	-2.04%

Volatility & Risk

Burberry Group has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500. Comparatively, Cato has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Burberry Group and Cato, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Burberry Group	0	0	0	3	4.00
Cato	1	0	0	0	1.00

Earnings & Valuation

This table compares Burberry Group and Cato”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Burberry Group	$3.14 billion	1.56	-$95.68 million	N/A	N/A
Cato	$660.06 million	0.09	-$18.06 million	($0.50)	-5.87

Cato has lower revenue, but higher earnings than Burberry Group.

Institutional & Insider Ownership

10.3% of Burberry Group shares are held by institutional investors. Comparatively, 61.1% of Cato shares are held by institutional investors. 18.1% of Cato shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Burberry Group beats Cato on 8 of the 11 factors compared between the two stocks.

About Burberry Group

Burberry Group plc, together with its subsidiaries, manufactures, retails, and wholesales luxury goods under the Burberry brand. The company operates in two segments, Retail/Wholesale and Licensing. It provides womenswear, menswear, childrenswear, beauty, eyewear, shoes, and accessories, as well as leather goods, such as bags. The company also licenses third parties to manufacture and distribute products using the Burberry trademarks. It sells its products through Burberry mainline stores, concessions, outlets, digital commerce, Burberry franchisees, department stores, and multi-brand specialty accounts, as well as through Burberry.com website. It operates in the Asia Pacific, Europe, the Middle East, India, Africa, and the Americas. The company was founded in 1856 and is headquartered in London, the United Kingdom.

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.