Reviewing Caleres (NYSE:CAL) and Signet Jewelers (NYSE:SIG)

Caleres (NYSE:CAL) and Signet Jewelers (NYSE:SIG) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, dividends, profitability, risk and institutional ownership.

Institutional & Insider Ownership

98.4% of Caleres shares are held by institutional investors. 3.1% of Caleres shares are held by company insiders. Comparatively, 1.2% of Signet Jewelers shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Caleres and Signet Jewelers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Caleres	1.85%	7.84%	2.42%
Signet Jewelers	5.19%	23.28%	7.61%

Dividends

Caleres pays an annual dividend of $0.28 per share and has a dividend yield of 2.4%. Signet Jewelers pays an annual dividend of $1.40 per share and has a dividend yield of 1.4%. Caleres pays out 18.7% of its earnings in the form of a dividend. Signet Jewelers pays out 16.1% 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. Signet Jewelers has raised its dividend for 4 consecutive years.

Volatility & Risk

Caleres has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500. Comparatively, Signet Jewelers has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Caleres and Signet Jewelers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Caleres	0	3	0	0	2.00
Signet Jewelers	0	7	5	0	2.42

Signet Jewelers has a consensus target price of $125.56, suggesting a potential upside of 25.07%. Given Signet Jewelers’ stronger consensus rating and higher possible upside, analysts clearly believe Signet Jewelers is more favorable than Caleres.

Earnings and Valuation

This table compares Caleres and Signet Jewelers”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Caleres	$2.76 billion	0.15	-$6.69 million	$1.50	7.85
Signet Jewelers	$6.81 billion	0.58	$294.40 million	$8.68	11.57

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

Summary

Signet Jewelers beats Caleres on 14 of the 17 factors compared between the two stocks.

About Caleres

Caleres, Inc. engages in the retail and wholesale of footwear business in the United States, Canada, East Asia, and internationally. It operates through Famous Footwear and Brand Portfolio segments. The company offers licensed, branded, and private-label athletic, casual, and dress footwear products. The company provides brand name athletic, casual, and dress shoes, including Nike, Skechers, adidas, Vans, Crocs, Converse, Puma, Birkenstock, New Balance, Under Armour, Dr. Martens, Asics, Timberland, Bearpaw, Skechers, HeyDude, Franco Sarto, Rykä, Vince, Bzees, Veronica Beard, and Zodiac brands, as well as company-owned and licensed brands, such as LifeStride, Dr. Scholl’s Shoes, Blowfish Malibu, and Naturalizer. The company also operates naturalizer.com, naturalizer.ca, vionicshoes.com, samedelman.com, samedelman.co.uk, allenedmonds.com, allenedmonds.ca, drschollsshoes.com, lifestride.com, francosarto.com, ryka.com, bzees.com, and zodiacshoes.com, as well as Vince.com, blowfishshoes.com, and veronicabeard.com websites. In addition, it designs, sources, manufactures, and markets footwear to retail stores, such as online retailers, national chains, department stores, mass merchandisers, and independent retailers. Further, the company wholesales men’s footwear, apparel, leather goods, and accessories under the Allen Edmonds brand; footwear for women under LifeStride brand; Italian footwear Franco Sarto brand; athletic footwear for women under the Rykä brand; women’s shoe collection under the Vince brand; women’s footwear under the Bzees brand; and women’s footwear collection under Veronica Beard brand. The company was formerly known as Brown Shoe Company, Inc. and changed its name to Caleres, Inc. in May 2015. Caleres, Inc. was founded in 1878 and is headquartered in Saint Louis, Missouri.

About Signet Jewelers

Signet Jewelers Limited operates as a diamond jewelry retailer. It operates through three segments: North America, International, and Other. The North America segment operates jewelry stores in jewelry stores in malls, mall-based kiosks, and off-mall locations in the United States and Canada primarily under the Kay Jewelers, Kay Jewelers Outlet, Jared The Galleria Of Jewelry, Jared Vault, Zales Outlet, Zales Jewelers, Diamonds Direct, James Allen, Banter by Piercing Pagoda, and Peoples Jewellers names, as well as operates online through its digital banners, James Allen and Blue Nile. This segment also engages in jewelry subscription business. The International segment operates stores in shopping malls and off-mall locations primarily under the H.Samuel and Ernest Jones brands in the United Kingdom, Republic of Ireland, and Channel Islands. The Other segment is involved in the purchase and conversion of rough diamonds to polished stones, as well as the provision of diamond polishing services. Signet Jewelers Limited is based in Hamilton, Bermuda.