Cato (CATO) vs. Its Competitors Financial Analysis

Cato (NYSE:CATO) is one of 285 public companies in the “Specialty Retail” industry, but how does it weigh in compared to its peers? We will compare Cato to related companies based on the strength of its analyst recommendations, earnings, dividends, institutional ownership, profitability, valuation and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for Cato and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cato	1	0	0	0	1.00
Cato Competitors	3674	15593	21618	590	2.46

As a group, “Specialty Retail” companies have a potential upside of 7.37%. Given Cato’s peers stronger consensus rating and higher possible upside, analysts clearly believe Cato has less favorable growth aspects than its peers.

Insider & Institutional Ownership

61.1% of Cato shares are owned by institutional investors. Comparatively, 51.9% of shares of all “Specialty Retail” companies are owned by institutional investors. 18.3% of Cato shares are owned by company insiders. Comparatively, 20.5% of shares of all “Specialty Retail” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk & Volatility

Cato has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500. Comparatively, Cato’s peers have a beta of 1.91, meaning that their average share price is 91% more volatile than the S&P 500.

Earnings & Valuation

This table compares Cato and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Cato	$653.81 million	-$5.91 million	-7.78
Cato Competitors	$7.05 billion	$386.47 million	32.98

Cato’s peers have higher revenue and earnings than Cato. Cato is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Cato and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cato	-0.87%	-3.39%	-1.29%
Cato Competitors	-3.69%	-13.95%	3.18%

Summary

Cato peers beat Cato on 10 of the 13 factors compared.

Cato Company Profile

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.