Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, women's apparel retailer Cato (NYSE: CATO ) has earned a respected four-star ranking.
With that in mind, let's take a closer look at Cato's business and see what CAPS investors are saying about the stock right now.
|Headquarters (Founded)||Charlotte, N.C. (1946)|
|Market Cap||$706 million|
|Trailing-12-Month Revenue||$935 million|
|Management||Chairman/CEO John Derham Cato (since 1999)
CFO John Howe (since 2008)
|Return on Equity (Average, Past 3 Years)||17.5%|
|Cash/Debt||$242 million / $0|
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 84% of the 92 members who have rated Cato believe the stock will outperform the S&P 500 going forward.
Not-hyped sector of women's clothing. I glanced through the website -- not much I'd be interested in if I were a hip chick, to be honest. I think their market is more suburban soccer mom. BUT, the stock has a near-perfect balance sheet, good and increasing dividends, and slightly bouncier-than-the-market technicals. ... Not likely to be a CAPS megapick, but likely to beat the market without a ton of risk.
But before you run out and start gobbling up shares, some of Cato's peers might actually be better suited to your own individual investing profile.
Chico's FAS (NYSE: CHS ) , for example, has a higher expected five-year growth rate than Cato, so it might be better for less risk-averse growth-seekers. Meanwhile, Guess? (NYSE: GES ) has historically posted much higher returns on equity, making it a good choice for investors who want "quality." And Limited Brands' (NYSE: LTD ) stock has doubled over the past two years, easily outperforming Cato's, which naturally gives momentum-hunters a better option. However, when you consider that Cato sports a higher dividend yield than each of its peers mentioned above, the stock seems nicely suited for income investors looking to get into the space.
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