Analyzing Carter’s (CRI) & LI NING Co Ltd/ADR (LNNGY)

Carter’s (NYSE: CRI) and LI NING Co Ltd/ADR (OTCMKTS:LNNGY) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares Carter’s and LI NING Co Ltd/ADR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carter’s 8.72% 35.09% 13.87%
LI NING Co Ltd/ADR N/A N/A N/A

Analyst Recommendations

This is a breakdown of recent ratings for Carter’s and LI NING Co Ltd/ADR, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carter’s 0 3 9 0 2.75
LI NING Co Ltd/ADR 0 0 0 0 N/A

Carter’s currently has a consensus target price of $119.75, indicating a potential upside of 8.91%. Given Carter’s’ higher probable upside, equities analysts plainly believe Carter’s is more favorable than LI NING Co Ltd/ADR.

Dividends

Carter’s pays an annual dividend of $1.80 per share and has a dividend yield of 1.6%. LI NING Co Ltd/ADR does not pay a dividend. Carter’s pays out 31.3% of its earnings in the form of a dividend. Carter’s has raised its dividend for 4 consecutive years.

Valuation and Earnings

This table compares Carter’s and LI NING Co Ltd/ADR’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Carter’s $3.40 billion 1.52 $302.76 million $5.76 19.09
LI NING Co Ltd/ADR $1.31 billion 1.73 $76.24 million $0.77 33.77

Carter’s has higher revenue and earnings than LI NING Co Ltd/ADR. Carter’s is trading at a lower price-to-earnings ratio than LI NING Co Ltd/ADR, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

96.9% of Carter’s shares are held by institutional investors. 3.3% of Carter’s shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Carter’s has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500. Comparatively, LI NING Co Ltd/ADR has a beta of -0.77, indicating that its stock price is 177% less volatile than the S&P 500.

Summary

Carter’s beats LI NING Co Ltd/ADR on 13 of the 16 factors compared between the two stocks.

Carter’s Company Profile

Carter's, Inc., together with its subsidiaries, designs, sources, and markets branded childrenswear under the Carter's, Child of Mine, Just One You, Precious Firsts, Simple Joys, OshKosh, Skip Hop, and other brands. The company operates through three segments: U.S. Retail, U.S. Wholesale, and International. Its Carter's products include baby products, such as bodysuits, pants, dresses, multi-piece sets, blankets, layette essentials, bibs, and booties; play clothes products comprising knit and woven cotton apparel; sleepwear products consisting of pajamas in cotton, fleece, and ploy-jersey; and other products, including bedding, outerwear, swimwear, footwear, socks, diaper bags, gift sets, toys, jewelry, cribs, paper goods, and hair accessories. The company's OshKosh brand products comprise playclothes products that include denim, overalls, woven bottoms, knit tops, bodysuits, and other playclothes for sizes newborn to 14. It also offers baby, sleepwear, outerwear, footwear, hosiery, and accessories under the OshKosh brand. The company distributes its products through department stores, chain and specialty stores, and discount retailers, as well as company-operated stores, and Websites. As of December 30, 2017, it operated 466 Carter's and 131 OshKosh stand-alone stores in the United States; 159 side-by-side and 74 co-branded stores in the United States; and 179 co-branded stores in Canada. The company was founded in 1865 and is headquartered in Atlanta, Georgia.

LI NING Co Ltd/ADR Company Profile

Li Ning Company Limited engages in the research, development, design, manufacture, marketing, distribution, and retail of sporting goods in the People's Republic of China. The company offers sporting goods, including footwear, apparel, equipment, and accessories for professional and leisure purposes primarily under the LI-NING brand. It also develops, manufactures, markets, distributes, and/or sells outdoor sports products under the AIGLE brand; fashionable fitness products for dance and yoga under the Danskin brand; and sports fashion products under the Lotto brand, as well as badminton equipment under the Kason brand. As of December 31, 2016, the company operated 6,440 LI-NING brand conventional stores, flagship stores, factory outlets, and discount stores. Li Ning Company Limited was incorporated in 2004 and is headquartered in Beijing, the People's Republic of China.

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