Weyco Group (NASDAQ:WEYS) & Carter’s (NYSE:CRI) Head to Head Survey

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

Profitability

This table compares Carter’s and Weyco Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carter’s	3.15%	16.71%	5.90%
Weyco Group	9.20%	10.34%	8.35%

Institutional and Insider Ownership

23.6% of Weyco Group shares are owned by institutional investors. 2.0% of Carter’s shares are owned by company insiders. Comparatively, 35.5% of Weyco Group shares are owned 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 summary of current recommendations for Carter’s and Weyco Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carter’s	3	3	0	0	1.50
Weyco Group	0	1	0	0	2.00

Carter’s presently has a consensus target price of $29.50, suggesting a potential downside of 6.90%. Given Carter’s’ higher possible upside, analysts plainly believe Carter’s is more favorable than Weyco Group.

Risk & Volatility

Carter’s has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, Weyco Group has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500.

Valuation and Earnings

This table compares Carter’s and Weyco Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carter’s	$2.83 billion	0.41	$185.51 million	$2.47	12.83
Weyco Group	$279.84 million	1.10	$30.32 million	$2.54	12.69

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

Dividends

Carter’s pays an annual dividend of $1.00 per share and has a dividend yield of 3.2%. Weyco Group pays an annual dividend of $1.08 per share and has a dividend yield of 3.4%. Carter’s pays out 40.5% of its earnings in the form of a dividend. Weyco Group pays out 42.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Weyco Group has raised its dividend for 3 consecutive years. Weyco Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Weyco Group beats Carter’s on 9 of the 16 factors compared between the two stocks.

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.

About Weyco Group

Weyco Group, Inc. designs and distributes footwear for men, women, and children. It operates in two segments, North American Wholesale Operations and North American Retail Operations. The company offers mid-priced leather dress shoes and casual footwear of man-made materials and leather; and outdoor boots, shoes, and sandals under the Florsheim, Nunn Bush, Stacy Adams, BOGS, Rafters, and Forsake brands. It is also involved in the wholesale of its products to footwear, department, and specialty stores, as well as e-commerce retailers in the United States and Canada. The company operates e-commerce business; and brick and mortar retail stores in the United States. In addition, it has licensing agreements with third parties, who sell its branded apparel, accessories, and specialty footwear. It operates in the United States, Canada, Australia, and South Africa. The company was formerly known as Weyenberg Shoe Manufacturing Company and changed its name to Weyco Group, Inc. in April 1990. Weyco Group, Inc. was incorporated in 1906 and is based in Milwaukee, Wisconsin.