New York & (NYSE: NWY) and Cato Corporation (The) (NYSE:CATO) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, risk, dividends, valuation and earnings.

Volatility and Risk

New York & has a beta of 1.43, indicating that its stock price is 43% more volatile than the S&P 500. Comparatively, Cato Corporation (The) has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500.

Earnings and Valuation

This table compares New York & and Cato Corporation (The)’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
New York & $914.20 million 0.13 $25.64 million ($0.19) -9.53
Cato Corporation (The) $876.41 million 0.36 $34.92 million $0.64 19.98

Cato Corporation (The) has higher revenue, but lower earnings than New York &. New York & is trading at a lower price-to-earnings ratio than Cato Corporation (The), indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

81.5% of New York & shares are owned by institutional investors. Comparatively, 88.4% of Cato Corporation (The) shares are owned by institutional investors. 54.3% of New York & shares are owned by insiders. Comparatively, 9.0% of Cato Corporation (The) shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares New York & and Cato Corporation (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New York & -1.31% -7.85% -2.04%
Cato Corporation (The) 1.92% 4.37% 2.86%

Analyst Ratings

This is a summary of recent ratings and recommmendations for New York & and Cato Corporation (The), as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New York & 0 0 0 0 N/A
Cato Corporation (The) 0 1 0 0 2.00

Cato Corporation (The) has a consensus target price of $20.00, indicating a potential upside of 56.37%. Given Cato Corporation (The)’s higher probable upside, analysts plainly believe Cato Corporation (The) is more favorable than New York &.

Dividends

Cato Corporation (The) pays an annual dividend of $1.32 per share and has a dividend yield of 10.3%. New York & does not pay a dividend. Cato Corporation (The) pays out 206.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. New York & has increased its dividend for 7 consecutive years.

Summary

Cato Corporation (The) beats New York & on 9 of the 14 factors compared between the two stocks.

About New York &

New York & Company, Inc. is a specialty retailer of women’s fashion apparel and accessories. The Company’s branded New York & Company merchandise is sold through its national network of retail stores and online at www.nyandcompany.com. It operates approximately 490 stores, including over 80 outlet stores in over 40 states. It offers brands, including NY&C, City Style, NY Style, Soho Jeans, Lerner and Lerner New York. It offers a merchandise assortment consisting of wear-to-work, casual apparel and accessories, including pants, dresses, jackets, knit tops, blouses, sweaters, denim, t-shirts, activewear, handbags, jewelry and shoes. Its stores are located in shopping malls, lifestyle centers, outlet centers, and off-mall locations, including urban street locations. The outlet stores offer a merchandise mix consisting of apparel and accessories.

About Cato Corporation (The)

The Cato Corporation is a fashion specialty retailer. The Company’s merchandise lines include dressy, career, and casual sportswear, dresses, coats, shoes, lingerie, costume jewelry, handbags, men’s wear and lines for kids and newborns. The Company has two segments: the operation of a fashion specialty stores segment (Retail Segment) and a credit card segment (Credit Segment). The Company operated its women’s fashion specialty retail stores in 33 states as of January 28, 2017, principally in the southeastern United States. The Company offers its own credit card to its customers and all credit authorizations, payment processing, and collection efforts are performed by a separate subsidiary of the Company. The Company’s stores offer an assortment of on-trend apparel and accessory items in primarily junior/missy, plus sizes, men’s and kids sizes with a focus on color, product coordination and selection.

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