Reviewing Caleres (NYSE:CAL) and NIKE (NYSE:NKE)

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

Valuation and Earnings

This table compares Caleres and NIKE”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Caleres	$2.72 billion	0.18	$107.25 million	$2.40	6.08
NIKE	$46.31 billion	2.44	$3.22 billion	$2.16	35.39

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

Volatility and Risk

Caleres has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, NIKE has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Caleres and NIKE, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Caleres	0	1	0	0	2.00
NIKE	0	12	17	3	2.72

Caleres presently has a consensus price target of $14.00, indicating a potential downside of 4.08%. NIKE has a consensus price target of $78.2222, indicating a potential upside of 2.32%. Given NIKE’s stronger consensus rating and higher probable upside, analysts plainly believe NIKE is more favorable than Caleres.

Insider and Institutional Ownership

98.4% of Caleres shares are held by institutional investors. Comparatively, 64.3% of NIKE shares are held by institutional investors. 4.1% of Caleres shares are held by company insiders. Comparatively, 0.8% of NIKE shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Caleres and NIKE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Caleres	3.11%	14.94%	4.68%
NIKE	6.95%	23.33%	8.57%

Dividends

Caleres pays an annual dividend of $0.28 per share and has a dividend yield of 1.9%. NIKE pays an annual dividend of $1.60 per share and has a dividend yield of 2.1%. Caleres pays out 11.7% of its earnings in the form of a dividend. NIKE pays out 74.1% 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. NIKE has increased its dividend for 22 consecutive years. NIKE is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

NIKE beats Caleres on 14 of the 18 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 NIKE

NIKE, Inc., together with its subsidiaries, designs, develops, markets, and sells athletic footwear, apparel, equipment, accessories, and services worldwide. The company provides athletic and casual footwear, apparel, and accessories under the Jumpman trademark; and casual sneakers, apparel, and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron, and Jack Purcell trademarks. It also sells a line of performance equipment and accessories comprising bags, sport balls, socks, eyewear, timepieces, digital devices, bats, gloves, protective equipment, and other equipment for sports activities under the NIKE brand; and various plastic products to other manufacturers. In addition, the company markets apparel with licensed college and professional team, and league logos, as well as sells sports apparel; and licenses unaffiliated parties to manufacture and sell apparel, digital devices, and applications and other equipment for sports activities under NIKE-owned trademarks. It sells its products to footwear stores; sporting goods stores; athletic specialty stores; department stores; skate, tennis, and golf shops; and other retail accounts through NIKE-owned retail stores, digital platforms, independent distributors, licensees, and sales representatives. NIKE, Inc. was founded in 1964 and is headquartered in Beaverton, Oregon.