Citi Trends (CTRN) and Hanesbrands (HBI) Financial Review

Citi Trends (NASDAQ: CTRN) and Hanesbrands (NYSE:HBI) are both retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Citi Trends and Hanesbrands, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Citi Trends 0 0 1 0 3.00
Hanesbrands 0 11 7 0 2.39

Citi Trends currently has a consensus price target of $32.00, suggesting a potential upside of 14.29%. Hanesbrands has a consensus price target of $24.33, suggesting a potential upside of 20.64%. Given Hanesbrands’ higher probable upside, analysts clearly believe Hanesbrands is more favorable than Citi Trends.

Valuation and Earnings

This table compares Citi Trends and Hanesbrands’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Citi Trends $755.24 million 0.51 $14.57 million $1.26 22.22
Hanesbrands $6.47 billion 1.12 $61.89 million $1.93 10.45

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

Dividends

Citi Trends pays an annual dividend of $0.32 per share and has a dividend yield of 1.1%. Hanesbrands pays an annual dividend of $0.60 per share and has a dividend yield of 3.0%. Citi Trends pays out 25.4% of its earnings in the form of a dividend. Hanesbrands pays out 31.1% 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. Hanesbrands has raised its dividend for 4 consecutive years. Hanesbrands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Citi Trends has a beta of 0.16, suggesting that its share price is 84% less volatile than the S&P 500. Comparatively, Hanesbrands has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Profitability

This table compares Citi Trends and Hanesbrands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Citi Trends 2.22% 9.32% 6.08%
Hanesbrands 1.08% 75.80% 9.76%

Insider & Institutional Ownership

91.8% of Citi Trends shares are held by institutional investors. Comparatively, 99.6% of Hanesbrands shares are held by institutional investors. 8.4% of Citi Trends shares are held by company insiders. Comparatively, 1.1% of Hanesbrands shares are held by company 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.

Summary

Hanesbrands beats Citi Trends on 12 of the 17 factors compared between the two stocks.

Citi Trends Company Profile

Citi Trends, Inc. operates as an off-price retailer of urban fashion apparel and accessories. The company offers apparel comprising fashion sportswear for men, women, and children, as well as offerings for newborns, infants, toddlers, boys, and girls; accessories comprising handbags, jewelry, footwear, belts, intimate apparel, scrubs, and sleepwear; and decorative home products, functional home products, beauty products, books, toys, and electronic accessories. It also offers its products through the Internet. The company offers its products primarily to African-Americans in the United States. As of March 23, 2017, it operated 538 stores in 31 states. The company was founded in 1946 and is headquartered in Savannah, Georgia.

Hanesbrands Company Profile

Hanesbrands Inc., a consumer goods company, designs, manufactures, sources, and sells a range of basic apparel for men, women, and children in the United States. The company operates through three segments: Innerwear, Activewear, and International. It sells bras, panties, men's underwear, children's underwear, activewear, socks, hosiery, intimate apparel, shapewears, and home goods; and T-shirts, fleece, sport shirts, performance T-shirts and shorts, sports bras, and thermals, as well as licensed logo apparel in collegiate bookstores, mass retailers, and other channels. The company licenses its Champion name for footwear and sports accessories. Hanesbrands Inc. provides its products primarily under the Hanes, Champion, Maidenform, Bali, JMS/Just My Size, Polo Ralph Lauren, Playtex, DKNY, Donna Karan, Hanes Beefy-T, Gear for Sports, Alternative, Bonds, DIM, Sheridan, Nur Die/Nur Der, Lovable, Wonderbra, Berlei, Abanderado, Shock Absorber, Zorba, Explorer, Kendall, Sol y Oro, Bellinda, and L'eggs brand names. The company markets its products through retailers, wholesalers, and third party embellishers, as well as directly to consumers through Internet. As of December 30, 2017, it operated 245 outlet stores in the United States and the Commonwealth of Puerto Rico, as well as 475 retail and outlet stores internationally. The company also sells its products in Europe, Australia, Asia, Latin America, Canada, the Middle East, Africa, Mexico, and Brazil. Hanesbrands Inc. was founded in 1901 and is headquartered in Winston-Salem, North Carolina.

Receive News & Ratings for Citi Trends Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Citi Trends and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply