Critical Comparison: Michael Kors Holdings Limited (KORS) versus Citi Trends (CTRN)
Michael Kors Holdings Limited (NYSE: KORS) and Citi Trends (NASDAQ:CTRN) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.
This table compares Michael Kors Holdings Limited and Citi Trends’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Michael Kors Holdings Limited||11.91%||40.26%||26.12%|
Institutional and Insider Ownership
83.4% of Michael Kors Holdings Limited shares are owned by institutional investors. Comparatively, 90.8% of Citi Trends shares are owned by institutional investors. 6.0% of Michael Kors Holdings Limited shares are owned by company insiders. Comparatively, 4.6% of Citi Trends shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This is a breakdown of recent ratings for Michael Kors Holdings Limited and Citi Trends, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Michael Kors Holdings Limited||3||18||6||0||2.11|
Michael Kors Holdings Limited currently has a consensus target price of $44.92, indicating a potential downside of 8.03%. Given Michael Kors Holdings Limited’s higher probable upside, analysts plainly believe Michael Kors Holdings Limited is more favorable than Citi Trends.
Citi Trends pays an annual dividend of $0.32 per share and has a dividend yield of 1.5%. Michael Kors Holdings Limited does not pay a dividend. Citi Trends pays out 35.2% of its earnings in the form of a dividend.
Earnings and Valuation
This table compares Michael Kors Holdings Limited and Citi Trends’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Michael Kors Holdings Limited||$4.46 billion||1.66||$1.07 billion||$3.22||15.17|
|Citi Trends||$712.38 million||0.42||$35.16 million||$0.91||23.00|
Michael Kors Holdings Limited has higher revenue and earnings than Citi Trends. Michael Kors Holdings Limited is trading at a lower price-to-earnings ratio than Citi Trends, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Michael Kors Holdings Limited has a beta of 0.03, suggesting that its stock price is 97% less volatile than the S&P 500. Comparatively, Citi Trends has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500.
Michael Kors Holdings Limited beats Citi Trends on 11 of the 15 factors compared between the two stocks.
About Michael Kors Holdings Limited
Michael Kors Holdings Limited is a designer, marketer, distributor and retailer of branded women’s apparel and accessories and men’s apparel bearing the Michael Kors tradename and related trademarks MICHAEL KORS, MICHAEL MICHAEL KORS, and various other related trademarks and logos. The Company operates through three segments: retail, wholesale and licensing. The Retail operations consist of collection stores and lifestyle stores, including concessions and outlet stores, located primarily in the Americas (the United States, Canada and Latin America), Europe and Asia, as well as e-commerce. Wholesale revenues are principally derived from major department and specialty stores located throughout the Americas, Europe and Asia. The Company licenses its trademarks on products, such as fragrances, beauty, eyewear, leather goods, jewelry, watches, coats, men’s suits, swimwear, furs and ties, as well as through geographic licenses.
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.
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