TJX Companies (NYSE:TJX) and Cato (NYSE:CATO) Financial Contrast

TJX Companies (NYSE:TJX) and Cato (NYSE:CATO) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, risk and institutional ownership.

Institutional and Insider Ownership

91.1% of TJX Companies shares are owned by institutional investors. Comparatively, 61.1% of Cato shares are owned by institutional investors. 0.2% of TJX Companies shares are owned by insiders. Comparatively, 18.3% of Cato shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares TJX Companies and Cato”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TJX Companies	$60.37 billion	2.41	$5.49 billion	$5.41	24.42
Cato	$653.81 million	0.08	-$5.91 million	($0.30)	-8.63

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

Volatility & Risk

TJX Companies has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, Cato has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for TJX Companies and Cato, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TJX Companies	0	4	16	2	2.91
Cato	1	0	0	0	1.00

TJX Companies presently has a consensus price target of $171.63, suggesting a potential upside of 29.94%. Given TJX Companies’ stronger consensus rating and higher possible upside, equities analysts plainly believe TJX Companies is more favorable than Cato.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
TJX Companies	9.73%	56.56%	15.92%
Cato	-0.87%	-3.39%	-1.29%

Summary

TJX Companies beats Cato on 14 of the 15 factors compared between the two stocks.

About TJX Companies

The TJX Companies, Inc., together with its subsidiaries, operates as an off-price apparel and home fashions retailer in the United States, Canada, Europe, and Australia. It operates through four segments: Marmaxx, HomeGoods, TJX Canada, and TJX International. The company sells family apparel, including footwear and accessories; home fashions, such as home basics, furniture, rugs, lighting products, giftware, soft home products, decorative accessories, tabletop, and cookware, as well as expanded pet, and gourmet food departments; jewelry and accessories; and other merchandise. It offers its products through stores and e-commerce sites. The TJX Companies, Inc. was incorporated in 1962 and is headquartered in Framingham, Massachusetts.

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, as well as men's wear, and lines for kids and infants. It operates its stores and e-commerce websites under the Cato, Cato Fashions, Cato Plus, It's Fashion, It's Fashion Metro, and Versona names. It also provides credit card services to its customers, as well as layaway plans for customers. The Cato Corporation was incorporated in 1946 and is headquartered in Charlotte, North Carolina.