Citi Trends (NASDAQ: CTRN) and Ascena Retail Group (NASDAQ:ASNA) are both small-cap retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, profitabiliy, earnings, dividends, analyst recommendations and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for Citi Trends and Ascena Retail Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Citi Trends 0 1 0 0 2.00
Ascena Retail Group 1 7 0 0 1.88

Citi Trends presently has a consensus target price of $16.00, indicating a potential downside of 21.88%. Ascena Retail Group has a consensus target price of $4.50, indicating a potential upside of 136.84%. Given Ascena Retail Group’s higher probable upside, analysts clearly believe Ascena Retail Group is more favorable than Citi Trends.

Risk & Volatility

Citi Trends has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500. Comparatively, Ascena Retail Group has a beta of 1.9, indicating that its stock price is 90% more volatile than the S&P 500.

Insider & Institutional Ownership

90.5% of Citi Trends shares are held by institutional investors. Comparatively, 97.7% of Ascena Retail Group shares are held by institutional investors. 4.6% of Citi Trends shares are held by insiders. Comparatively, 8.6% of Ascena Retail Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Citi Trends pays an annual dividend of $0.32 per share and has a dividend yield of 1.6%. Ascena Retail Group does not pay a dividend. Citi Trends pays out 35.2% of its earnings in the form of a dividend.

Profitability

This table compares Citi Trends and Ascena Retail Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Citi Trends 1.92% 6.56% 4.50%
Ascena Retail Group -15.25% 2.96% 0.94%

Earnings & Valuation

This table compares Citi Trends and Ascena Retail Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Citi Trends $701.46 million 0.43 $35.89 million $0.91 22.51
Ascena Retail Group $6.80 billion 0.05 $581.10 million ($5.33) -0.36

Ascena Retail Group has higher revenue and earnings than Citi Trends. Ascena Retail Group is trading at a lower price-to-earnings ratio than Citi Trends, indicating that it is currently the more affordable of 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 Ascena Retail Group

Ascena Retail Group, Inc. is a specialty retailer of apparel for women and tween girls. The Company operates through six segments: ANN, Justice, Lane Bryant, maurices, dressbarn and Catherines. The ANN segment offers feminine classics and fashion choices, sold primarily under the Ann Taylor and LOFT brands. The Justice segment offers apparel to girls who are aged 6 to 12. The Lane Bryant segment offers apparel to female customers in plus-sizes 14-28. The maurices segment offers women’s casual clothing, career wear, dressy apparel, active wear and accessories. The dressbarn segment consists of the specialty retail, outlet and e-commerce operations of the dressbarn brand. The Catherines segment offers classic apparel and accessories to female customers for wear-to-work and casual lifestyles. As of July 30, 2016, the Company operated approximately 4,900 stores in 49 United States’ states, the District of Columbia, Canada and Puerto Rico.

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