Comparing Canada Goose (GOOS) & Carter’s (CRI)

Canada Goose (NYSE: GOOS) and Carter’s (NYSE:CRI) are both mid-cap retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, profitability, earnings and risk.

Valuation and Earnings

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This table compares Canada Goose and Carter’s’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Canada Goose $307.64 million 11.96 $16.48 million $0.33 103.30
Carter’s $3.40 billion 1.44 $302.76 million $5.76 18.06

Carter’s has higher revenue and earnings than Canada Goose. Carter’s is trading at a lower price-to-earnings ratio than Canada Goose, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Canada Goose and Carter’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Canada Goose 12.91% 41.96% 15.48%
Carter’s 8.90% 35.46% 13.81%

Dividends

Carter’s pays an annual dividend of $1.80 per share and has a dividend yield of 1.7%. Canada Goose does not pay a dividend. Carter’s pays out 31.3% of its earnings in the form of a dividend. Carter’s has raised its dividend for 4 consecutive years.

Institutional and Insider Ownership

28.0% of Canada Goose shares are owned by institutional investors. Comparatively, 97.5% of Carter’s shares are owned by institutional investors. 3.1% of Carter’s shares 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.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Canada Goose and Carter’s, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Canada Goose 0 5 10 0 2.67
Carter’s 0 4 9 0 2.69

Canada Goose currently has a consensus target price of $30.33, indicating a potential downside of 11.02%. Carter’s has a consensus target price of $119.83, indicating a potential upside of 15.21%. Given Carter’s’ stronger consensus rating and higher possible upside, analysts plainly believe Carter’s is more favorable than Canada Goose.

Summary

Carter’s beats Canada Goose on 9 of the 16 factors compared between the two stocks.

About Canada Goose

Canada Goose Holdings Inc. designs, manufactures, and sells premium outdoor apparel for men, women, youth, children, and babies in Canada, the United States, and internationally. The company operates in two segments, Wholesale and Direct to Consumer. It offers parkas, jackets, shells, vests, knitwear, and accessories for fall, winter, and spring seasons. The company sells its products through online retailers and distributors; and its e-commerce sites and retail stores. Canada Goose Holdings Inc. was founded in 1957 and is headquartered in Toronto, Canada.

About Carter’s

Carter's, Inc., together with its subsidiaries, designs, sources, and markets branded childrenswear under the Carter's, Child of Mine, Just One You, Precious Firsts, Simple Joys, OshKosh, Skip Hop, and other brands. The company operates through three segments: U.S. Retail, U.S. Wholesale, and International. Its Carter's products include baby products, such as bodysuits, pants, dresses, multi-piece sets, blankets, layette essentials, bibs, and booties; play clothes products comprising knit and woven cotton apparel; sleepwear products consisting of pajamas in cotton, fleece, and ploy-jersey; and other products, including bedding, outerwear, swimwear, footwear, socks, diaper bags, gift sets, toys, jewelry, cribs, paper goods, and hair accessories. The company's OshKosh brand products comprise playclothes products that include denim, overalls, woven bottoms, knit tops, bodysuits, and other playclothes for sizes newborn to 14. It also offers baby, sleepwear, outerwear, footwear, hosiery, and accessories under the OshKosh brand. The company distributes its products through department stores, chain and specialty stores, and discount retailers, as well as company-operated stores, and Websites. As of December 30, 2017, it operated 466 Carter's and 131 OshKosh stand-alone stores in the United States; 159 side-by-side and 74 co-branded stores in the United States; and 179 co-branded stores in Canada. The company was founded in 1865 and is headquartered in Atlanta, Georgia.

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