Citi Trends (NASDAQ: CTRN) and Francesca's (NASDAQ:FRAN) are both small-cap cyclical consumer goods & services companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, dividends and valuation.

Earnings and Valuation

This table compares Citi Trends and Francesca's’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Citi Trends $695.17 million 0.51 $13.33 million $1.01 25.32
Francesca's $487.19 million 0.42 $42.00 million $0.71 7.87

Francesca's has lower revenue, but higher earnings than Citi Trends. Francesca's is trading at a lower price-to-earnings ratio than Citi Trends, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for Citi Trends and Francesca's, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Citi Trends 0 0 0 0 N/A
Francesca's 0 6 1 0 2.14

Francesca's has a consensus target price of $10.67, indicating a potential upside of 90.82%. Given Francesca's’ higher probable upside, analysts clearly believe Francesca's is more favorable than Citi Trends.

Risk & Volatility

Citi Trends has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500. Comparatively, Francesca's has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500.

Dividends

Citi Trends pays an annual dividend of $0.32 per share and has a dividend yield of 1.3%. Francesca's does not pay a dividend. Citi Trends pays out 31.7% of its earnings in the form of a dividend.

Profitability

This table compares Citi Trends and Francesca's’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Citi Trends 2.04% 7.70% 5.14%
Francesca's 5.52% 23.19% 13.64%

Institutional & Insider Ownership

86.5% of Citi Trends shares are owned by institutional investors. 4.6% of Citi Trends shares are owned by company insiders. Comparatively, 1.2% of Francesca's shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Citi Trends beats Francesca's on 8 of the 15 factors compared between the two stocks.

About Citi Trends

Citi Trends, Inc. is a retailer of urban fashion apparel and accessories. The Company’s segment is retail operations. The Company operates approximately 520 stores in both urban and rural markets in over 30 states. The Company offers products under its brands, such as Citi Steps and Red Ape. The Company’s merchandise includes apparel, accessories and home. Within apparel, the Company offers fashion sportswear for men, women and children, including offerings for newborns, infants, toddlers, boys and girls. Accessories include handbags, jewelry, footwear, belts, intimate apparel, scrubs and sleepwear. The Company’s home merchandise includes decorative home product, functional home product, beauty, books, toys and electronic accessories. The Company sources its merchandise from approximately 1,700 vendors, consisting of domestic manufacturers and importers.

About Francesca's

Francesca’s Holdings Corporation is a holding company. The Company is a specialty retailer, which operates a chain of boutiques across the United States. The Company offers a mix of apparel, jewelry, accessories and gifts. As of January 28, 2017, the Company operated 671 boutiques in 48 states and the District of Columbia, and also served its customers through www.francescas.com, its e-commerce Website. The Company offers apparel, such as dresses, fashion tops, sweaters, cardigans and wraps, bottoms, outerwear and jackets, tees and tanks, and intimates. The Company provides jewelry, such as necklaces, earrings, bracelets and rings. The Company offers accessories, such as handbags, clutches, wallets, shoes, belts, hats, scarves, sunglasses, watches and hair accessories. The Company provides gifts, such as fragrance, candles, bath and body, home accessories, books, wall art, nail polish and miscellaneous items. The Company operates its boutiques under the francesca’s brand.

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