High Tide (NASDAQ:HITI – Get Free Report) and Cato (NYSE:CATO – Get Free Report) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.
Analyst Ratings
This is a breakdown of recent ratings and recommmendations for High Tide and Cato, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| High Tide | 1 | 0 | 3 | 0 | 2.50 |
| Cato | 1 | 0 | 0 | 0 | 1.00 |
High Tide currently has a consensus price target of $5.62, indicating a potential upside of 101.61%. Given High Tide’s stronger consensus rating and higher possible upside, equities analysts plainly believe High Tide is more favorable than Cato.
Risk and Volatility
Earnings and Valuation
This table compares High Tide and Cato”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| High Tide | $425.10 million | 0.59 | -$36.23 million | ($0.23) | -12.13 |
| Cato | $643.67 million | 0.08 | -$5.91 million | ($0.30) | -8.19 |
Cato has higher revenue and earnings than High Tide. High Tide is trading at a lower price-to-earnings ratio than Cato, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares High Tide and Cato’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| High Tide | -4.73% | 5.13% | 1.55% |
| Cato | -0.87% | -3.39% | -1.29% |
Institutional and Insider Ownership
4.5% of High Tide shares are held by institutional investors. Comparatively, 61.1% of Cato shares are held by institutional investors. 12.4% of High Tide shares are held by company insiders. Comparatively, 18.3% of Cato shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Summary
High Tide beats Cato on 8 of the 14 factors compared between the two stocks.
About High Tide
High Tide Inc. engages in the cannabis retail business in Canada, the United States, and internationally. The company operates through Retail and Wholesale segments. It operates licensed retail cannabis stores; and provides data analytics services. In addition, the company manufactures and distributes consumption accessories. Further, it sells its products through online sales via e-commerce platform. The company offers its products under the Daily High Club, DankStop, FABCBD, GC, Nuleaf, Smoke Cartel, and Blessed CBD brands. The company was formerly known as High Tide Ventures Inc. and changed its name to High Tide Inc. in October 2018. High Tide Inc. was founded in 2009 and is headquartered in Calgary, Canada.
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.
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