Analyzing Hennes & Mauritz (OTCMKTS:HNNMY) & Shoe Carnival (NASDAQ:SCVL)

Shoe Carnival (NASDAQ:SCVL) and Hennes & Mauritz (OTCMKTS:HNNMY) are both retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Shoe Carnival and Hennes & Mauritz, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shoe Carnival	0	2	0	1	2.67
Hennes & Mauritz	2	4	0	1	2.00

Shoe Carnival currently has a consensus price target of $22.00, suggesting a potential upside of 41.12%. Given Shoe Carnival’s stronger consensus rating and higher possible upside, analysts plainly believe Shoe Carnival is more favorable than Hennes & Mauritz.

Profitability

This table compares Shoe Carnival and Hennes & Mauritz’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shoe Carnival	4.60%	7.75%	4.47%
Hennes & Mauritz	5.48%	31.74%	7.38%

Insider & Institutional Ownership

66.1% of Shoe Carnival shares are owned by institutional investors. Comparatively, 0.0% of Hennes & Mauritz shares are owned by institutional investors. 35.5% of Shoe Carnival shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Shoe Carnival pays an annual dividend of $0.60 per share and has a dividend yield of 3.8%. Hennes & Mauritz pays an annual dividend of $0.09 per share and has a dividend yield of 2.4%. Shoe Carnival pays out 31.6% of its earnings in the form of a dividend. Hennes & Mauritz pays out 56.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Shoe Carnival has raised its dividend for 14 consecutive years. Shoe Carnival is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Shoe Carnival and Hennes & Mauritz”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shoe Carnival	$1.14 billion	0.38	$52.27 million	$1.90	8.21
Hennes & Mauritz	$23.01 billion	1.13	$1.23 billion	$0.16	23.13

Hennes & Mauritz has higher revenue and earnings than Shoe Carnival. Shoe Carnival is trading at a lower price-to-earnings ratio than Hennes & Mauritz, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Shoe Carnival has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500. Comparatively, Hennes & Mauritz has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.

Summary

Shoe Carnival beats Hennes & Mauritz on 9 of the 16 factors compared between the two stocks.

About Shoe Carnival

Shoe Carnival, Inc., together with its subsidiaries, operates as a family footwear retailer in the United States. The company offers range of dress, casual, work, and athletic shoes, as well as sandals and boots for men, women, and children; and various accessories. The company also operates stores, and sells its products through online shopping at shoecarnival.com, as well as through mobile app. Shoe Carnival, Inc. was founded in 1978 and is headquartered in Evansville, Indiana.

About Hennes & Mauritz

H & M Hennes & Mauritz AB (publ) provides clothing, accessories, footwear, cosmetics, home textiles, and homeware for women, men, and children worldwide. It offers sportswear, shoes, bags, beauty products, activewear, jeans, and ready-to-wear; and interior products, including bed linens, dinnerware, textiles, furniture, and lighting. The company provides its products under the H&M, H&M HOME, H&M Move, H&M Beauty, COS, Weekday, Monki, & Other Stories, ARKET, Afound, and Singular Society brand names. In addition, it operates Sellpy, a broad digital platform for second-hand fashion and other products; and Creator Studio, a global platform for merchandise design and production, as well as provides solutions to extend the useful life of unwanted garments through reuse and recycling under Looper Textile name. The company offers its products through online and physical stores. H & M Hennes & Mauritz AB (publ) was incorporated in 1943 and is headquartered in Stockholm, Sweden.