Analyzing Cache (CACH) and Cato (CATO)

Cache (OTCMKTS: CACH) and Cato (NYSE:CATO) are both small-cap retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, valuation, institutional ownership, analyst recommendations, earnings and risk.

Earnings & Valuation

This table compares Cache and Cato’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cache N/A N/A N/A N/A N/A
Cato $849.98 million 0.47 $8.54 million N/A N/A

Cato has higher revenue and earnings than Cache.

Dividends

Cato pays an annual dividend of $1.32 per share and has a dividend yield of 8.2%. Cache does not pay a dividend. Cato has raised its dividend for 8 consecutive years.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cache 0 0 0 0 N/A
Cato 0 1 0 0 2.00

Cato has a consensus price target of $20.00, indicating a potential upside of 24.15%. Given Cato’s higher possible upside, analysts clearly believe Cato is more favorable than Cache.

Profitability

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

Net Margins Return on Equity Return on Assets
Cache N/A N/A N/A
Cato 1.00% 5.87% 3.81%

Insider & Institutional Ownership

78.9% of Cato shares are owned by institutional investors. 23.0% of Cache shares are owned by insiders. Comparatively, 9.6% of Cato shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Cache has a beta of -2.59, indicating that its share price is 359% less volatile than the S&P 500. Comparatively, Cato has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500.

Summary

Cato beats Cache on 9 of the 10 factors compared between the two stocks.

About Cache

Cache, Inc., together with its subsidiaries, operates as a mall-based and online woman's specialty retailer of apparel and accessories in the United States. The company designs and markets sportswear, such as tops, sweaters, and jackets and bottoms for day or evening events; dresses ranges from shorter lengths to long for day, evening, and events; and accessories, including jewelry, belts, scarves, and handbags under the Cache brand name. As of August 11, 2014, it operated 239 stores located in 41 states, the Virgin Islands, and Puerto Rico. The company was founded in 1975 and is headquartered in New York, New York.

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. It also provides men's wear, as well as lines for kids and newborns. The company operates its stores and e-commerce Websites under the Cato, Cato Fashions, Cato Plus, It's Fashion, It's Fashion Metro, and Versona names. As of February 3, 2018, it operated 1,351 stores in 33 states. The company also provides credit card services to its customers, as well as layaway plans. The Cato Corporation was founded in 1946 and is headquartered in Charlotte, North Carolina.

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