Citi Trends (NASDAQ: CTRN) and Express (NYSE:EXPR) are both small-cap retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Profitability

This table compares Citi Trends and Express’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Citi Trends 2.04% 7.57% 5.08%
Express 0.85% 4.25% 2.24%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Citi Trends and Express, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Citi Trends 0 0 0 0 N/A
Express 0 9 0 0 2.00

Express has a consensus target price of $8.50, indicating a potential upside of 8.56%. Given Express’ higher possible upside, analysts clearly believe Express is more favorable than Citi Trends.

Dividends

Citi Trends pays an annual dividend of $0.32 per share and has a dividend yield of 1.3%. Express does not pay a dividend. Citi Trends pays out 31.4% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Citi Trends and Express’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Citi Trends $695.17 million 0.49 $13.33 million $1.02 24.30
Express $2.19 billion 0.28 $57.41 million $0.23 34.04

Express has higher revenue and earnings than Citi Trends. Citi Trends is trading at a lower price-to-earnings ratio than Express, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Citi Trends has a beta of 0.42, indicating that its stock price is 58% less volatile than the S&P 500. Comparatively, Express has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500.

Insider and Institutional Ownership

87.7% of Citi Trends shares are owned by institutional investors. Comparatively, 97.9% of Express shares are owned by institutional investors. 4.6% of Citi Trends shares are owned by insiders. Comparatively, 2.6% of Express shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

About Citi Trends

Citi Trends, Inc. is a retailer of urban fashion apparel and accessories. The Company’s segment is retail operations. The Company operates approximately 520 stores in both urban and rural markets in over 30 states. The Company offers products under its brands, such as Citi Steps and Red Ape. The Company’s merchandise includes apparel, accessories and home. Within apparel, the Company offers fashion sportswear for men, women and children, including offerings for newborns, infants, toddlers, boys and girls. Accessories include handbags, jewelry, footwear, belts, intimate apparel, scrubs and sleepwear. The Company’s home merchandise includes decorative home product, functional home product, beauty, books, toys and electronic accessories. The Company sources its merchandise from approximately 1,700 vendors, consisting of domestic manufacturers and importers.

About Express

Express, Inc. is a specialty apparel and accessories retailer offering both women’s and men’s merchandise. The Company targets women and men between 20 and 30 years old. It offers an assortment of fashionable apparel and accessories to address fashion needs across multiple aspects of lifestyles, including work, casual, jeanswear and going-out occasions. It is engaged in the operation of its brick-and-mortar retail and outlet stores, e-commerce operations and franchise operations. It sells its products through its e-commerce Website, www.express.com and its mobile application, and has franchise agreements with franchisees that operate Express locations in Latin America. It operated 656 stores across the United States, in Canada and in Puerto Rico, including 104 factory outlet stores, as of January 28, 2017. Its products are created by its in-house design team. Its portfolio of apparel products includes brands, such as Portofino shirt, Editor pant and 1MX shirt.

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