Carter’s (NYSE:CRI) & Under Armour (NYSE:UA) Head-To-Head Contrast

Under Armour (NYSE:UA) and Carter’s (NYSE:CRI) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, risk, earnings, valuation and institutional ownership.

Risk and Volatility

Under Armour has a beta of 1.53, meaning that its stock price is 53% more volatile than the S&P 500. Comparatively, Carter’s has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500.

Profitability

This table compares Under Armour and Carter’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Under Armour	-9.99%	4.04%	1.37%
Carter’s	6.55%	12.78%	4.67%

Valuation & Earnings

This table compares Under Armour and Carter’s”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Under Armour	$4.93 billion	0.39	-$495.64 million	($1.15)	-3.88
Carter’s	$2.98 billion	0.39	$91.80 million	$5.34	5.97

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

Insider & Institutional Ownership

36.3% of Under Armour shares are held by institutional investors. 15.6% of Under Armour shares are held by company insiders. Comparatively, 3.2% of Carter’s shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Under Armour and Carter’s, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Under Armour	2	1	0	0	1.33
Carter’s	1	5	3	1	2.40

Under Armour presently has a consensus target price of $5.50, suggesting a potential upside of 23.18%. Carter’s has a consensus target price of $39.00, suggesting a potential upside of 22.37%. Given Under Armour’s higher probable upside, equities research analysts clearly believe Under Armour is more favorable than Carter’s.

Summary

Carter’s beats Under Armour on 10 of the 15 factors compared between the two stocks.

About Under Armour

Under Armour, Inc., together with its subsidiaries, develops, markets, and distributes performance apparel, footwear, and accessories for men, women, and youth. The company provides its apparel in compression, fitted, and loose fit types. It also offers footwear products for running, training, basketball, cleated sports, recovery, and outdoor applications. In addition, the company provides accessories, which include gloves, bags, headwear, and sports masks; and digital subscription, advertising, and other digital business services. It primarily offers its products under the UNDER ARMOUR, HEATGEAR, COLDGEAR, HOVR, UA, PROTECT THIS HOUSE, I WILL, UA Logo, ARMOUR FLEECE, and ARMOUR BRA brands. The company sells its products through wholesale channels, including national and regional sporting goods chains, independent and specialty retailers, department store chains, mono-branded Under Armour retail stores, institutional athletic departments, and leagues and teams, as well as independent distributors; and directly to consumers through a network of 439 Brand and Factory House stores, as well as through e-commerce websites. It operates in the United States, Canada, Europe, the Middle East, Africa, the Asia-Pacific, and Latin America. Under Armour, Inc. was incorporated in 1996 and is headquartered in Baltimore, Maryland.

About Carter’s

Carter’s, Inc. engages in the business of brand marketing of young children’s apparel. It operates through the following segments: the United States (US) Retail, US Wholesale, and International. The US Retail segment includes selling products through retail stores and ecommerce websites. The US Wholesale segment focuses on wholesale partners. The International segment is involved in selling in retail stores and ecommerce websites in Canada and Mexico, and to international wholesale customers and licensees. The company was founded by William Carter in 1865 and is headquartered in Atlanta, GA.