GAP (NYSE:GAP) and Citi Trends (NASDAQ:CTRN) Head-To-Head Survey

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

Dividends

Citi Trends pays an annual dividend of $0.32 per share and has a dividend yield of 1.7%. GAP pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. Citi Trends pays out -29.6% of its earnings in the form of a dividend. GAP pays out -2.2% 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.

Analyst Ratings

This is a breakdown of current ratings for Citi Trends and GAP, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citi Trends	0	1	2	0	2.67
GAP	0	3	0	0	2.00

Citi Trends currently has a consensus price target of $23.00, suggesting a potential upside of 24.32%. GAP has a consensus price target of $27.00, suggesting a potential upside of 26.05%. Given GAP’s higher probable upside, analysts clearly believe GAP is more favorable than Citi Trends.

Risk and Volatility

Citi Trends has a beta of 2.39, meaning that its stock price is 139% more volatile than the S&P 500. Comparatively, GAP has a beta of 2.35, meaning that its stock price is 135% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Citi Trends	-2.92%	-12.62%	-3.77%
GAP	5.05%	28.89%	6.92%

Valuation & Earnings

This table compares Citi Trends and GAP”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)	-17.13
GAP	$15.17 billion	0.53	$502.00 million	($27.20)	-0.79

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

Summary

GAP beats Citi Trends on 9 of the 14 factors compared between the two stocks.

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 GAP

The Gap, Inc. operates as an apparel retail company. The company offers apparel, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, and Athleta brands. Its products include adult apparel and accessories; and fitness and lifestyle products for use in yoga, training, sports, travel, and everyday activities for women and girls. The company offers its products through company-operated stores, franchise stores, websites, and third-party arrangements. It has franchise agreements to operate Old Navy, Gap, Banana Republic, and Athleta stores and websites in Asia, Europe, Latin America, the Middle East, and Africa. The Gap, Inc. was incorporated in 1969 and is headquartered in San Francisco, California.