Comparing Canadian Tire (OTCMKTS:CDNAF) and Harvey Norman (OTCMKTS:HNORY)

Harvey Norman (OTCMKTS:HNORY) and Canadian Tire (OTCMKTS:CDNAF) are both consumer cyclical companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Profitability

This table compares Harvey Norman and Canadian Tire’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Harvey Norman	N/A	N/A	N/A
Canadian Tire	3.24%	9.79%	3.06%

Valuation and Earnings

This table compares Harvey Norman and Canadian Tire”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Harvey Norman	N/A	N/A	N/A	$0.98	12.74
Canadian Tire	$11.68 billion	0.64	$376.67 million	$3.21	44.23

Canadian Tire has higher revenue and earnings than Harvey Norman. Harvey Norman is trading at a lower price-to-earnings ratio than Canadian Tire, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings for Harvey Norman and Canadian Tire, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Harvey Norman	0	0	0	0	0.00
Canadian Tire	0	5	0	0	2.00

Canadian Tire has a consensus target price of $205.00, indicating a potential upside of 44.40%. Given Canadian Tire’s stronger consensus rating and higher probable upside, analysts clearly believe Canadian Tire is more favorable than Harvey Norman.

Summary

Canadian Tire beats Harvey Norman on 8 of the 8 factors compared between the two stocks.

About Harvey Norman

Harvey Norman Holdings Limited engages in the integrated retail, franchise, property, and digital system businesses. It franchises and sells products in various categories, including electrical goods, furniture, computerized communications, bedding and Manchester, kitchen and small appliances, bathroom and tiles, and carpets and floorings. It operates complexes under the Harvey Norman, Domayne, and Joyce Mayne brands in Australia; and company-operated stores under the Harvey Norman brand in New Zealand, Singapore, Malaysia, Slovenia, Croatia, Ireland, and Northern Ireland. It is also involved in the property investment and media placement activities; acts as a lessor of premises to Harvey Norman, Domayne, and Joyce Mayne franchisees and other third parties, as well as retail properties; development and sale of properties; and provision of consumer finance and other commercial loans and advances. The company was founded in 1982 and is headquartered in Homebush West, Australia.

About Canadian Tire

Canadian Tire Corporation, Limited provides a range of retail goods and services in Canada. It operates in three segments: Retail, CT REIT, and Financial Services. The Retail segment retails automotive maintenance products and accessories, parts, and tires, as well as automotive services and roadside assistance; electrical, hardware, home environment, paint, plumbing, and tool products; cleaning, food & drink, home décor, home essentials, home organization, kitchen, and pet care products; camping, exercise, hockey, hunting, fishing, seasonal recreation, and team sports and golf products; and backyard living, backyard fun, cycling, gardening, outdoor tools, seasonal, and toy products. This segment offers its products under the Canadian Tire, Canadian Tire Gas, Pro Hockey Life, Mark's, PartSource, Helly Hansen, Party City, and SportChek brand names. This segment also participates in loyalty programs, as well as sells its products online. The CT REIT segment operates as a closed-end real estate investment trust that holds a portfolio of properties comprising Canadian Tire stores, Canadian Tire anchored retail developments, industrial properties, mixed-use commercial property, and development properties. The Financial Services segment provides consumer credit cards, in-store financing, insurance products, and retail and broker deposits; and savings accounts and guaranteed investment certificates. Canadian Tire Corporation, Limited was founded in 1922 and is headquartered in Toronto, Canada.