Carter's (NYSE: CRI) and Sequential Brands Group (NASDAQ:SQBG) are both consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.
This table compares Carter's and Sequential Brands Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Sequential Brands Group||-14.35%||2.26%||0.85%|
Carter's has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500. Comparatively, Sequential Brands Group has a beta of -0.03, indicating that its stock price is 103% less volatile than the S&P 500.
Institutional and Insider Ownership
97.0% of Carter's shares are held by institutional investors. Comparatively, 47.8% of Sequential Brands Group shares are held by institutional investors. 3.1% of Carter's shares are held by insiders. Comparatively, 27.3% of Sequential Brands Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Carter's pays an annual dividend of $1.48 per share and has a dividend yield of 1.3%. Sequential Brands Group does not pay a dividend. Carter's pays out 28.5% of its earnings in the form of a dividend. Sequential Brands Group has increased its dividend for 4 consecutive years.
This is a breakdown of recent ratings and recommmendations for Carter's and Sequential Brands Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Sequential Brands Group||0||4||3||0||2.43|
Carter's currently has a consensus price target of $117.75, suggesting a potential upside of 0.92%. Sequential Brands Group has a consensus price target of $6.92, suggesting a potential upside of 249.33%. Given Sequential Brands Group’s higher probable upside, analysts plainly believe Sequential Brands Group is more favorable than Carter's.
Earnings and Valuation
This table compares Carter's and Sequential Brands Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Carter's||$3.20 billion||1.73||$258.10 million||$5.20||22.44|
|Sequential Brands Group||$155.53 million||0.80||-$820,000.00||($0.38)||-5.21|
Carter's has higher revenue and earnings than Sequential Brands Group. Sequential Brands Group is trading at a lower price-to-earnings ratio than Carter's, indicating that it is currently the more affordable of the two stocks.
Carter's beats Sequential Brands Group on 13 of the 17 factors compared between the two stocks.
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.
About Sequential Brands Group
Sequential Brands Group, Inc. owns a portfolio of consumer brands in the fashion, home, athletic and lifestyle categories. The Company’s portfolio of consumer brands includes Martha Stewart, Emeril Lagasse, Jessica Simpson, Joe’s Jeans, William Rast, Ellen Tracy, Revo, AND1 and Avia. The Company’s brands are licensed for a range of product categories, including apparel, footwear, eyewear, fashion accessories and home goods. The Company licenses brands to both wholesale and direct-to-retail licensees. The Company licenses the Martha Stewart brand to various licensees, including retailers, such as Macy’s, The Home Depot, PetSmart and Staples. The Jessica Simpson Collection is a signature lifestyle concept designed in collaboration with Jessica Simpson, which offers various product categories, including footwear, apparel, fragrance, fashion accessories, maternity apparel, girls clothing and a home line. The Avia brand offers running and activewear products.
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