Canada Goose (NYSE:GOOS) vs. Cato (NYSE:CATO) Critical Survey

Cato (NYSE:CATO) and Canada Goose (NYSE:GOOS) 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 dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Profitability

This table compares Cato and Canada Goose’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%
Canada Goose	1.35%	13.89%	4.28%

Valuation & Earnings

This table compares Cato and Canada Goose”s gross revenue, earnings per share (EPS) 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)	-9.45
Canada Goose	$969.08 million	1.21	$68.13 million	$0.13	93.12

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.

Volatility and Risk

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

Institutional and Insider Ownership

61.1% of Cato shares are owned by institutional investors. Comparatively, 83.6% of Canada Goose shares are owned by institutional investors. 18.3% of Cato shares are owned by company insiders. Comparatively, 0.5% of Canada Goose shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Cato and Canada Goose, as reported by MarketBeat.com.

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

Canada Goose has a consensus price target of $15.17, suggesting a potential upside of 25.29%. Given Canada Goose’s stronger consensus rating and higher possible upside, 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 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 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.