Cato (NYSE:CATO – Get Free Report) and Floor & Decor (NYSE:FND – Get Free Report) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, earnings, risk, valuation, analyst recommendations, profitability and institutional ownership.
Analyst Ratings
This is a breakdown of recent ratings and price targets for Cato and Floor & Decor, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Cato | 1 | 0 | 0 | 0 | 1.00 |
| Floor & Decor | 5 | 12 | 4 | 0 | 1.95 |
Floor & Decor has a consensus target price of $54.70, indicating a potential upside of 7.33%. Given Floor & Decor’s stronger consensus rating and higher possible upside, analysts plainly believe Floor & Decor is more favorable than Cato.
Valuation & Earnings
This table compares Cato and Floor & Decor”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Cato | $653.81 million | 0.07 | -$5.91 million | ($0.30) | -7.60 |
| Floor & Decor | $4.68 billion | 1.13 | $208.65 million | $2.23 | 22.85 |
Floor & Decor has higher revenue and earnings than Cato. Cato is trading at a lower price-to-earnings ratio than Floor & Decor, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Cato and Floor & Decor’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Cato | -0.87% | -3.39% | -1.29% |
| Floor & Decor | 5.05% | 8.40% | 3.68% |
Risk and Volatility
Cato has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500. Comparatively, Floor & Decor has a beta of 1.56, meaning that its share price is 56% more volatile than the S&P 500.
Institutional and Insider Ownership
61.1% of Cato shares are owned by institutional investors. 18.3% of Cato shares are owned by insiders. Comparatively, 1.8% of Floor & Decor shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Summary
Floor & Decor beats Cato on 11 of the 13 factors compared between the two stocks.
About Cato
The Cato Corporation is a specialty retailer of value-priced fashion merchandise for women. Based in Charlotte, North Carolina, the company sells apparel, accessories, footwear, and jewelry through its retail store network and online channels. Cato operates under several retail banners, including Cato, Versona, and It’s Fashion Metro. Its merchandise is designed to serve a broad range of customers and includes casualwear, career clothing, dresses, seasonal fashions, plus-size selections, shoes, and fashion accessories.
About Floor & Decor
Floor & Decor Holdings, Inc. is a specialty retailer of hard-surface flooring and related products. Its assortment includes tile, natural stone, wood, laminate and vinyl flooring, along with installation materials, tools and decorative accessories. The company serves both professional flooring contractors and homeowners through warehouse-format stores and online sales. Many stores also offer design services and product displays to help customers plan residential and commercial projects. Founded in 2000 and headquartered in Atlanta, Georgia, Floor & Decor operates stores across the United States.
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