Carter’s (NYSE: CRI) and Quiksilver (NYSE:ZQK) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, dividends, valuation and profitabiliy.

Profitability

This table compares Carter’s and Quiksilver’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carter’s 7.82% 32.77% 13.23%
Quiksilver -39.62% N/A -53.85%

Valuation & Earnings

This table compares Carter’s and Quiksilver’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Carter’s $3.21 billion 1.32 $490.80 million $5.02 17.51
Quiksilver N/A N/A N/A N/A N/A

Carter’s has higher revenue and earnings than Quiksilver.

Dividends

Carter’s pays an annual dividend of $1.48 per share and has a dividend yield of 1.7%. Quiksilver does not pay a dividend. Carter’s pays out 29.5% of its earnings in the form of a dividend. Quiksilver has increased its dividend for 3 consecutive years.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Carter’s and Quiksilver, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carter’s 0 4 6 0 2.60
Quiksilver 0 0 0 0 N/A

Carter’s currently has a consensus target price of $103.00, suggesting a potential upside of 17.21%. Given Carter’s’ higher probable upside, equities research analysts plainly believe Carter’s is more favorable than Quiksilver.

Insider and Institutional Ownership

99.6% of Carter’s shares are held by institutional investors. 3.1% of Carter’s shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Carter’s beats Quiksilver on 9 of the 11 factors compared between the two stocks.

Carter’s Company Profile

Carter’s, Inc. (Carter’s) is a marketer of apparel for babies and young children in the United States and Canada. The Company owns two brand names in the children’s apparel industry, Carter’s and OshKosh B’gosh (OshKosh). The Company operates through five segments: Carter’s Retail, Carter’s Wholesale, OshKosh Retail, OshKosh Wholesale and International. Its International segment includes company-operated retail stores and online Websites, wholesale operations, and royalty income from its international licensees. It markets products for consumers, and offer various product categories, including baby, sleepwear, play clothes, and related accessories. Its multi-channel international business model – retail stores, online and wholesale – enables it to reach a range of consumers around the world. As of December 31, 2016, its channels included approximately 18,000 wholesale locations, 792 stores in the United States, 164 stores in Canada, and its Canadian and the United States Websites.

Quiksilver Company Profile

Quiksilver, Inc. is an outdoor sports lifestyle company. The Company designs, develops and distributes branded apparel, footwear, accessories and related products. The Company has four operating segments: the Americas; Europe, Middle East and Africa (EMEA); Asia/Pacific (APAC), and Corporate Operations. The Company’s Americas segment, consisting of North, South and Central America, includes revenues primarily from the United States, Canada, Brazil and Mexico. The EMEA segment, consisting of Europe, the Middle East and Africa, includes revenues primarily from continental Europe, the United Kingdom, Russia and South Africa. The APAC segment, consisting of Asia and the Pacific Rim, includes revenues primarily from Australia, Japan, New Zealand, South Korea, Taiwan and Indonesia. The Company markets its products under the brands, such as Quiksilver, Roxy and DC. The Quiksilver brand includes a range of apparel and accessories for men and boys inspired by surfing and boardriding sports.

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