Comparing Cato (NYSE:CATO) and Stage Stores (OTCMKTS:SSINQ)

Cato (NYSE:CATO) and Stage Stores (OTCMKTS:SSINQ) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Cato and Stage Stores, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cato	1	0	0	0	1.00
Stage Stores	0	0	0	0	0.00

Given Stage Stores’ higher probable upside, analysts clearly believe Stage Stores is more favorable than Cato.

Profitability

This table compares Cato and Stage Stores’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cato	0.01%	0.05%	0.02%
Stage Stores	N/A	N/A	N/A

Earnings and Valuation

This table compares Cato and Stage Stores”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cato	$653.81 million	0.10	-$5.91 million	($0.01)	-319.50
Stage Stores	N/A	N/A	N/A	N/A	N/A

Stage Stores has lower revenue, but higher earnings than Cato.

Institutional & Insider Ownership

61.1% of Cato shares are held by institutional investors. 18.3% of Cato shares are held by company insiders. Comparatively, 11.6% of Stage Stores shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Cato beats Stage Stores on 7 of the 8 factors compared between the two stocks.

About Cato

The Cato Corporation, together with its subsidiaries, operates as a specialty retailer of fashion apparel and accessories primarily in the southeastern United States. It operates through two segments, Retail and Credit. The company's stores and e-commerce websites offer a range of apparel and accessories, including dressy, career, and casual sportswear; and dresses, coats, shoes, lingerie, costume jewelry, and handbags, as well as men's wear, and lines for kids and infants. It operates its stores and e-commerce websites under the Cato, Cato Fashions, Cato Plus, It's Fashion, It's Fashion Metro, and Versona names. It also provides credit card services to its customers, as well as layaway plans for customers. The Cato Corporation was incorporated in 1946 and is headquartered in Charlotte, North Carolina.

About Stage Stores

Stage Stores, Inc. operates specialty department stores primarily in small towns and rural communities in the United States. The company sells moderately priced and brand name apparel, accessories, cosmetics, footwear, and home goods through its department stores, off-price stores, and e-commerce Website, as well as through private label credit card and loyalty programs. As of September 17, 2019, it operated 625 BEALLS, GOODY'S, PALAIS ROYAL, PEEBLES, and STAGE specialty department stores; and 158 GORDMANS off-price stores. The company was founded in 1988 and is headquartered in Houston, Texas. On May 10, 2020, Stage Stores, Inc., along with its affiliate, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas. The plan was later approved as Chapter 11 liquidation on August 14, 2020.