Contrasting Caleres (NYSE:CAL) and McRae Industries (NYSE:MCRAA)

Samuel Edwards

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McRae Industries (OTCMKTS:MCRAA) and Caleres (NYSE:CAL) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, profitability and earnings.

Institutional and Insider Ownership

78.9% of Caleres shares are held by institutional investors. 30.3% of McRae Industries shares are held by company insiders. Comparatively, 5.6% of Caleres shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

McRae Industries pays an annual dividend of $0.52 per share and has a dividend yield of 2.6%. Caleres pays an annual dividend of $0.28 per share and has a dividend yield of 3.6%. Caleres pays out 13.3% of its earnings in the form of a dividend. Caleres has increased its dividend for 1 consecutive years. Caleres is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares McRae Industries and Caleres’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
McRae Industries $69.31 million 0.56 -$110,000.00 N/A N/A
Caleres $2.92 billion 0.10 $62.82 million $2.10 3.66
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Caleres has higher revenue and earnings than McRae Industries.

Risk and Volatility

McRae Industries has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500. Comparatively, Caleres has a beta of 1.99, suggesting that its share price is 99% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for McRae Industries and Caleres, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
McRae Industries 0 0 0 0 N/A
Caleres 0 1 3 0 2.75

Caleres has a consensus target price of $17.75, suggesting a potential upside of 131.12%. Given Caleres’ higher possible upside, analysts plainly believe Caleres is more favorable than McRae Industries.

Profitability

This table compares McRae Industries and Caleres’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
McRae Industries -0.16% N/A N/A
Caleres -14.57% -5.67% -1.13%

Summary

Caleres beats McRae Industries on 9 of the 15 factors compared between the two stocks.

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About McRae Industries

McRae Industries, Inc. manufactures and sells military combat boots for the United States Army. The company also imports and sells western and work boots. It offers its products for men, women, and children under the Dan Post, Laredo Western Boots, Dingo, John Deere, Johnny Poppers, McRae Industrial, and McRae Footwear brand names. McRae Industries, Inc. was founded in 1959 and is headquartered in Mount Gilead, North Carolina.

About Caleres

Caleres, Inc. engages in the retail and wholesale of footwear in the United States, China, Canada, Guam, and Italy. It operates through Famous Footwear and Brand Portfolio segments. The company offers licensed, branded, and private-label casual, dress, and athletic footwear products to women, men, and children. Its retail shoe stores provide brand-name athletic, casual, and dress shoes, including Nike, Skechers, adidas, Vans, Converse, Under Armour, New Balance, Puma, Sperry, Asics, Bearpaw, Sof Sole, Birkenstock, and Timberland, as well as company-owned and licensed brands, such as Dr. Scholl’s Shoes, LifeStride, Naturalizer, Fergie Footwear, Blowfish Malibu, Circus by Sam Edelman, and Vionic. The company also operates Naturalizer.com, Naturalizer.ca, SamEdelman.com, AllenEdmonds.com, DrSchollsShoes.com, LifeStride.com, FrancoSarto.com, Vionicshoes.com, Ryka.com, Bzees.com, ZodiacShoes.com, and ViaSpiga.com, as well as Vince.com, FergieShoes.com, CarlosShoes.com, Blowfishshoes.com, and VeronicaBeard.com. In addition, it designs, sources, and markets footwear to retail stores, such as national chains, online retailers, department stores, mass merchandisers, independent retailers, and catalogs. Further, the company wholesales men’s apparel, leather goods, and accessories under the Allen Edmonds brand; Italian footwear Franco Sarto brand; women’s shoe collection under the Vince brand; athletic footwear for women under the Rykä brand; and women’s sporty footwear under the Bzees brand, as well as Via Spiga brand. It operates approximately 1,177 retail stores. 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 St. Louis, Missouri.

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