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Fundamental analysis: The Cato Corporation (CATO)

Awarener score: 7.2

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Superb), the business stability (Poor) and growth (Bottom), and the company's inclination to return cash to the stockholders (Superb).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 2.0

  • Business has been shrinking at a very fast pace. It's been substantially worse when measured against peer companies.
  • The Cato Corporation business varies, ups and downs are rather normal. Risk is sufficient. It looks worse than most rivals.

Margins score: 5.0

  • CATO profit margins -on goods and services sold- are usually sufficient. They stand somewhat worse than rival companies.
  • Business profit on sales tends to be hardly sufficient. It's substantially worse when measured against competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually meagre. They remain in a weak position compared to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be hardly sufficient in relation to total revenues. They're still mediocre against similar companies.
  • Profits -before income taxes- are usually hardly sufficient considering total sales, and remain weak when measured against rivals.
  • Total net profit tends to be hardly sufficient when confronted to sales. Company stands weak when measured against comparable firms.

Growth score: 1.1

  • The Cato Corporation profit -on goods and services sold- has been shrinking. It's been a slight improvement compared to competitors.
  • In recent years, the firm hasn't always been able to profit from operations, which has been bottom tier against comparable firms.
  • In past years, the company couldn't always turn a profit -available to repay debt and purchase properties-, which compares last-in-rank when measured against peer enterprises.
  • In the previous years, the firm couldn't always make a profit -before income taxes and interests on loans taken-. It turns to be a disappointment compared to similar stocks.
  • In past years, at least once the company lost money -before income taxes-. It was bottom tier against rivals.
  • In the previous years, the firm had at least a total net loss, and last-in-rank when measured against peer companies.
  • The company lost money at least once in the past years. It's been a disappointment compared to industry peers.

Miscellaneous score: 10.0

  • CATO managed to get a credit on income taxes in the past years, even though it earned money. It's been top-notch against peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 5.8

  • The Cato Corporation usually gets sufficient returns on the resources it controls. It proves weak when measured against peer firms.
  • The company normally gets hardly sufficient proceeds -on the resources directly invested in the business-. They remain in a weak position compared to similar companies.
  • There's usually some profitability -in relation to owned resources-. It ranks weak when measured against competitors.
  • In the past, got sufficient returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's weak when measured against comparable enterprises.

Usage of Funds score: 7.0

  • CATO usually uses a portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is rather normal. It stands weak when measured against rival firms.
  • The company is usually replacing some proportion of the property, plant, and equipment that gets old, saving part of the funds for something else, which is substantially worse when measured against industry peers.
  • In the past twelve months it paid outstanding dividends, considering the current stock price. It came well ranked against competitors.
  • Has greatly increased dividend payments in the past years. Business prospects are most likely good. The company has behaved close to average when compared to similar firms.
  • The company usually uses a portion of genuine funds generated to pay dividends. Dividend payments should be safe, unless business prospects are challenged. Sustainability looks mediocre against comparable companies.
  • The company usually significantly reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains excellent in relation to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands impressive in relation to rivals.
  • The company uses somewhat more funds to reward investors than it can genuinely generate, so some part of them is paid out of existing cash or by borrowing money, both of which will eventually reach a limit. Either business somewhat improves, or rewards will probably not be sustained at this pace. It still looks weak when measured against competitors.

Balance Sheet score: 5.9

  • The Cato Corporation has no intangible assets (like brands and goodwill) according to accounting books, which is safest. It happens to be top tier when measured against peer companies.
  • The company has more short-term resources than short-term obligations. Liquidity concerns shouldn't be an issue. It turns to be close to average when compared to similar firms.
  • Roughly a quarter of resources controlled were provided for with financial debt. Creditors have some claims on the company. It remains somewhat better than rival firms.
  • Most controlled resources can be made into cash reasonably quick, which is good for liquidity and risk. It looks great when measured against rivals.
  • For every dollar of short-term obligations, the company has almost another of cash and short-term receivables. It's in good shape compared to peer firms.
  • For every dollar of short-term obligations, the company has almost another of cash and equivalents, which is well ranked against similar enterprises.
  • Usually, sales are on cash. It still ranks last-in-rank when measured against peers.
  • Normally has approximately six months of sales worth in inventory. It comes up as lacking compared to competitors.
  • On average, it takes higher than six months from the purchase to charging customers. It happens to be worse than most peers.
  • On average pays suppliers approximately four months or higher after the purchase. It ranks top tier when measured against industry peers.
  • The company pays its suppliers roughly one month before charging its customers, so there's sparse money invested in working capital. It's rather normal in relation to similar companies.
  • Company earns net interest income on its investments and therefore is in a quite comfortable financial position. It stands top-notch against rival firms.
  • Business earnings have usually been good when measured against loans taken. Cutting back reinvesting in the business, it could take less than three years to repay the obligations with current profitability. It ranks below average when measured against comparable enterprises.
  • Revenues are low in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks in a very weak position compared to similar firms.
  • Resource exploitation is quite good when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still worse than most peer companies.

Valuation score: 7.6

  • The Cato Corporation looks heavily expensive in relation to profits and financial position. It happens to be almost average when measured against competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains impressive in relation to peers.
  • In the past twelve months, the company generated extraordinary free funds in relation to the stock price, which stands top-notch against similar companies.
  • The company usually generates plenty more genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, at the current price the share looks to be very attractive. It's still great when measured against industry firms.
  • In the past twelve months, the company has significantly rewarded investors, considering both dividends and share on the pie of earnings. It came up excellent in relation to peer ventures.
  • The company has substantial more cash than debt. It might be poised to increase stockholder payments, or to fund new business projects. It looks slightly worse than similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation is huge, as profits were extremely low in relative terms. It ranks almost average when measured against peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a low relationship. One common cause includes profitability being poor. It looks rather normal in relation to rival firms.
  • The stock price is at or below the accounting book value. Unless profitability is really low, the stock may be selling a t a discount. Pay attention to the other key indicators for hints. The company remains top-notch against peer firms.
  • In the past twelve months, the operating business lost a little money. It happens to be almost average when measured against industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown an excellent earnings power ability when measured against the current stock price and financial position. Further analysis is recommended, as the stock might currently be undervalued. It's still rather normal in relation to peer companies.

Total score: 5.6


CATO logos

Company at a glance: The Cato Corporation (CATO)

Sector, industry: Consumer Cyclical, Apparel Retail

Market Cap: 0.20 billions

Revenues TTM: 0.38 billions

The Cato Corporation, together with its subsidiaries, operates as a specialty retailer of fashion apparel and accessories primarily in the southeastern United States. It operates through two segments, Retail and Credit. The company's stores and e-commerce websites offer a range of apparel and accessories, including dressy, career, and casual sportswear; and dresses, coats, shoes, lingerie, costume jewelry, and handbags, as well as men's wear, and lines for kids and infants. It operates its stores and e-commerce websites under the Cato, Cato Fashions, Cato Plus, It's Fashion, It's Fashion Metro, and Versona names. As of January 29, 2022, the company operated 1,311 stores in 32 states. It also provides credit card services to its customers, as well as layaway plans for customers who agree to make periodic payments. The company was incorporated in 1946 and is headquartered in Charlotte, North Carolina.

Awarener score: 7.2

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Superb), the business stability (Poor) and growth (Bottom), and the company's inclination to return cash to the stockholders (Superb).