Contrasting Carter’s (NYSE:CRI) and Birkenstock (NYSE:BIRK)

Carter’s (NYSE:CRI) and Birkenstock (NYSE:BIRK) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, profitability, dividends, risk, valuation, earnings and institutional ownership.

Risk and Volatility

Carter’s has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Birkenstock has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500.

Profitability

This table compares Carter’s and Birkenstock’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carter’s	5.80%	23.50%	8.27%
Birkenstock	12.86%	10.22%	5.53%

Institutional & Insider Ownership

19.9% of Birkenstock shares are held by institutional investors. 2.0% of Carter’s shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Carter’s and Birkenstock”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carter’s	$2.84 billion	0.41	$185.51 million	$4.52	7.04
Birkenstock	$1.96 billion	4.64	$207.85 million	$1.42	34.00

Birkenstock has lower revenue, but higher earnings than Carter’s. Carter’s is trading at a lower price-to-earnings ratio than Birkenstock, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Carter’s and Birkenstock, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carter’s	3	2	0	0	1.40
Birkenstock	0	0	12	1	3.08

Carter’s presently has a consensus target price of $36.80, suggesting a potential upside of 15.58%. Birkenstock has a consensus target price of $69.27, suggesting a potential upside of 43.47%. Given Birkenstock’s stronger consensus rating and higher probable upside, analysts clearly believe Birkenstock is more favorable than Carter’s.

Summary

Birkenstock beats Carter’s on 10 of the 15 factors compared between the two stocks.

About Carter’s

Carter’s, Inc. engages in the business of brand marketing of young children’s apparel. It operates through the following segments: the United States (US) Retail, US Wholesale, and International. The US Retail segment includes selling products through retail stores and ecommerce websites. The US Wholesale segment focuses on wholesale partners. The International segment is involved in selling in retail stores and ecommerce websites in Canada and Mexico, and to international wholesale customers and licensees. The company was founded by William Carter in 1865 and is headquartered in Atlanta, GA.

About Birkenstock

Birkenstock Holding plc manufactures and sells footwear products. It also offers sandals, shoes, closed-toe silhouettes, skincare products, and accessories. The company sells its products through e-commerce sites and a network of owned retail stores, as well as business-to-business channels. It operates in the United States, Brazil, Canada, Mexico, Europe, APMA, and internationally. Birkenstock Holding plc was founded in 1774 and is based in London, the United Kingdom. Birkenstock Holding plc is a subsidiary of BK LC Lux MidCo S.à r.l.