Head-To-Head Comparison: Fast Retailing (OTCMKTS:FRCOY) & Citi Trends (NASDAQ:CTRN)

Citi Trends (NASDAQ:CTRN) and Fast Retailing (OTCMKTS:FRCOY) are both consumer cyclical companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, earnings, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Citi Trends and Fast Retailing, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citi Trends	0	1	2	0	2.67
Fast Retailing	0	0	0	0	N/A

Citi Trends currently has a consensus target price of $23.00, indicating a potential upside of 25.14%. Given Citi Trends’ higher possible upside, research analysts plainly believe Citi Trends is more favorable than Fast Retailing.

Insider and Institutional Ownership

0.0% of Fast Retailing shares are held by institutional investors. 3.8% of Citi Trends shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Citi Trends and Fast Retailing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Citi Trends	-2.92%	-12.25%	-3.77%
Fast Retailing	N/A	N/A	N/A

Valuation & Earnings

This table compares Citi Trends and Fast Retailing”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citi Trends	$757.54 million	0.21	-$11.98 million	($1.08)	-17.02
Fast Retailing	N/A	N/A	N/A	$99.47	0.34

Fast Retailing has lower revenue, but higher earnings than Citi Trends. Citi Trends is trading at a lower price-to-earnings ratio than Fast Retailing, 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 1.7%. Fast Retailing pays an annual dividend of $0.15 per share and has a dividend yield of 0.4%. Citi Trends pays out -29.6% of its earnings in the form of a dividend. Fast Retailing pays out 0.2% 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. Citi Trends is clearly the better dividend stock, given its higher yield and lower payout ratio.

About Citi Trends

Citi Trends, Inc. operates as a value retailer of fashion apparel, accessories, and home goods. The company offers apparel, such as fashion sportswear and footwear for men and ladies, as well as apparel for kids, including newborns, infants, toddlers, boys, and girls; sleepwear, lingerie, and scrubs for ladies; and kids uniforms and accessories. It also provides accessories and beauty products that include handbags, luggage, hats, belts, sunglasses, jewelry, and watches, as well as offers outerwear for men and women. In addition, the company offers home and lifestyle products comprising home products for the bedroom, bathroom, kitchen, and decorative accessories; and food, tech, team sports, health and products, as well as seasonal items, books, and toys. Citi Trends, Inc. provides its products primarily to African American and multicultural families in the United States. The company was formerly known as Allied Fashion, Inc. and changed its name to Citi Trends, Inc. in 2001. Citi Trends, Inc. was founded in 1946 and is headquartered in Savannah, Georgia.

About Fast Retailing

Fast Retailing Co., Ltd., through its subsidiaries, operates as an apparel designer and retailer in Japan and internationally. The company operates through UNIQLO Japan, UNIQLO International, GU, and Global Brands segments. It manufactures and retails clothing for men, women, children, and babies, as well as offers shoes and other goods and items. The company operates stores and franchises under the UNIQLO, GU, PLST, Theory, COMPTOIR DES COTONNIERS, J Brand, and PRINCESSE TAM.TAM brand names. It also sells its products through online; and provides real estate leasing services. The company was formerly known as Ogori Shoji Co., Ltd. and changed its name to Fast Retailing Co., Ltd. in September 1991. Fast Retailing Co., Ltd. was founded in 1949 and is headquartered in Yamaguchi, Japan.