The Cato Corporation operates as a specialty retailer of fashion apparel and accessories in the southeastern United States. The company's stores offer an assortment of apparel and accessories, including dressy, career, and casual sportswear; dresses; coats; shoes; lingerie; costume jewelry; and handbags for fashion and value conscious females. As of April 30, 2011, it operated 1,282 women’s fashion specialty retail stores in 31 states under the Cato, Cato Fashions, Cato Plus, its Fashion, and its Fashion Metro brand names. (Business Description from Yahoo Finance)
- It pays a dividend of 3.9% and its dividend payout in the last five years has gone up over 80%.
- CATO has over $9 a share in net cash and taking out its cash, the stock sells for less than 7 times this year’s EPS estimates.
- CATO has beat earnings estimates the last six quarters by an average of 9% over analysts’ consensus.
- Its five year projected PEG is 1.07 which is a 20% discount to its five year average.
American Eagle Outfitters, Inc. operates as an apparel and accessories retailer in the United States and Canada. The company offers denim wear, sweaters, graphic T-shirts, fleece, outerwear, and accessories under the American Eagle Outfitters brand name targeting 15 to 25 year old men and women; and clothing and accessories for kids ages 2 to 10 through online under the 77kids by american eagle brand name and for babies under the brand name little77. It also provides a collection of Dormwear, intimates, and personal care products for girls under aerie by American Eagle brand name. (Business Description from Yahoo Finance)
- American Eagle provides a robust dividend yield of 4.1% and has more than doubled its dividend payout in the last five years.
- AEO has more than $2.50 a share in net cash and netting out its cash, AEO sells for 9 times this year’s EPS estimates.
- AEO has a five year projected PEG of just over 1 and a couple of insiders have bought shares in the last couple of weeks.
- If you net out cash on its balance sheet, American Eagle is trading at less than 4 times operating cash flow and about $1.3mm per existing store. Very cheap levels by anyone’s definition.
The Men’s Wearhouse, Inc. operates as a specialty retailer of mens suits in the United States and Canada. The company operates its retail apparel stores under the Men’s Wearhouse, Men’s Wearhouse and Tux, and K&G brand names in 47 states in the U.S. and the District of Columbia. (Business Description from Yahoo Finance)
- It pays a dividend of 1.8% and has doubled its dividend payout in the last five years.
- Men’s Wearhouse has almost $3 a share in net cash and stripping out its cash, MW sells for 11 times this year’s EPS estimates.
- MW has beat earnings estimates the last six quarters and consensus estimates for 2011 and 2012 have risen over the last three months.
- The median analyst price target on MW is $38 which is significantly above its current price of $26 a share.
Disclosure: I am long AEO.
Additional disclosure: May also pick up CATO in the next 72 hours