Cato (NYSE:CATO) & Kering (OTCMKTS:PPRUY) Critical Review

Cato (NYSE:CATO) and Kering (OTCMKTS:PPRUY) are both retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, dividends, analyst recommendations, risk and valuation.

Volatility & Risk

Cato has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, Kering has a beta of 1.51, indicating that its stock price is 51% more volatile than the S&P 500.

Earnings and Valuation

This table compares Cato and Kering”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cato	$653.81 million	0.09	-$5.91 million	($0.31)	-9.18
Kering	$16.60 billion	2.22	$81.46 million	N/A	N/A

Kering has higher revenue and earnings than Cato.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cato	-0.90%	-3.57%	-1.35%
Kering	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent ratings and target prices for Cato and Kering, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cato	1	0	0	0	1.00
Kering	3	5	2	0	1.90

Insider & Institutional Ownership

61.1% of Cato shares are owned by institutional investors. Comparatively, 1.0% of Kering shares are owned by institutional investors. 18.1% of Cato shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Kering beats Cato on 9 of the 11 factors compared between the two stocks.

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.

About Kering

Kering SA manages the development of a series of renowned houses in fashion, leather goods and jewelry in France, the Asia-Pacific, Western Europe, North America, Japan, and internationally. The company offers ready-to-wear products apparel and accessories for men and women. It also offers leather goods and shoes; watches and jewelry; eyewear products; and fragrances and cosmetics. The company provides Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, Brioni, Boucheron, Pomellato, DoDo, Qeelin, Ginori 1735, Kering Beauté, and Kering Eyewear brands. The company was formerly known as PPR SA and changed its name to Kering SA in June 2013. Kering SA was founded in 1963 and is based in Paris, France.