Immersion (NASDAQ:IMMR – Get Free Report) and Citi Trends (NASDAQ:CTRN – Get Free Report) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, valuation and earnings.
Risk and Volatility
Immersion has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, Citi Trends has a beta of 1.81, meaning that its share price is 81% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of current recommendations for Immersion and Citi Trends, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Immersion | 0 | 2 | 1 | 0 | 2.33 |
| Citi Trends | 0 | 1 | 2 | 0 | 2.67 |
Insider and Institutional Ownership
60.6% of Immersion shares are owned by institutional investors. 10.6% of Immersion shares are owned by company insiders. Comparatively, 9.6% of Citi Trends shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Dividends
Immersion pays an annual dividend of $0.30 per share and has a dividend yield of 4.1%. Citi Trends pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. Immersion pays out 88.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Citi Trends pays out 39.0% of its earnings in the form of a dividend.
Valuation & Earnings
This table compares Immersion and Citi Trends”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Immersion | $1.73 billion | 0.14 | $4.52 million | $0.34 | 21.62 |
| Citi Trends | $869.97 million | 0.47 | $5.21 million | $0.82 | 59.57 |
Citi Trends has lower revenue, but higher earnings than Immersion. Immersion is trading at a lower price-to-earnings ratio than Citi Trends, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Immersion and Citi Trends’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Immersion | 0.60% | 1.83% | 0.82% |
| Citi Trends | 0.84% | 8.11% | 2.00% |
Summary
Citi Trends beats Immersion on 11 of the 16 factors compared between the two stocks.
About Immersion
Immersion Corporation, together with its subsidiaries, engages in the creation, design, development, and licensing of haptic technologies that allow people to use their sense of touch to engage with and experience various digital products in North America, Europe, and Asia. The company provides technology, patent, and combined licenses. It serves markets, including mobility, gaming, automotive, virtual and augmented reality, and wearables, as well as residential, commercial, and industrial Internet of Things. The company was incorporated in 1993 and is headquartered in Aventura, Florida.
About Citi Trends
Citi Trends, Inc. operates as a value retailer of fashion apparel, accessories, and home goods. The company offers apparel, such as fashion sportswear and footwear for men and ladies, as well as apparel for kids, including newborns, infants, toddlers, boys, and girls; sleepwear, lingerie, and scrubs for ladies; and kids uniforms and accessories. It also provides accessories and beauty products that include handbags, luggage, hats, belts, sunglasses, jewelry, and watches, as well as offers outerwear for men and women. In addition, the company offers home and lifestyle products comprising home products for the bedroom, bathroom, kitchen, and decorative accessories; and food, tech, team sports, health and products, as well as seasonal items, books, and toys. Citi Trends, Inc. provides its products primarily to African American and multicultural families in the United States. The company was formerly known as Allied Fashion, Inc. and changed its name to Citi Trends, Inc. in 2001. Citi Trends, Inc. was founded in 1946 and is headquartered in Savannah, Georgia.
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