Critical Analysis: Canadian Tire (OTCMKTS:CDNAF) & Jumbo (OTCMKTS:JUMSF)

Jumbo (OTCMKTS:JUMSF) and Canadian Tire (OTCMKTS:CDNAF) are both consumer cyclical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations for Jumbo and Canadian Tire, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jumbo	0	0	0	0	0.00
Canadian Tire	0	5	1	0	2.17

Canadian Tire has a consensus target price of $205.00, indicating a potential upside of 61.38%. Given Canadian Tire’s stronger consensus rating and higher possible upside, analysts plainly believe Canadian Tire is more favorable than Jumbo.

Earnings & Valuation

This table compares Jumbo and Canadian Tire”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jumbo	N/A	N/A	N/A	N/A	N/A
Canadian Tire	$11.68 billion	0.58	$376.67 million	$4.68	27.14

Canadian Tire has higher revenue and earnings than Jumbo.

Profitability

This table compares Jumbo and Canadian Tire’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jumbo	N/A	N/A	N/A
Canadian Tire	3.63%	10.65%	3.36%

Institutional & Insider Ownership

38.7% of Jumbo shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Canadian Tire beats Jumbo on 7 of the 8 factors compared between the two stocks.

About Jumbo

Jumbo S.A. engages in the retail sale of toys, baby products, gift articles, household products, stationery, seasonal and decoration items, books, and related products in Greece, Cyprus, Bulgaria, and Romania. The company operates e-jumbo, an online store. It is involved in the wholesale of toys and related products to third parties. Jumbo S.A. was incorporated in 1986 and is headquartered in Athens, Greece.

About Canadian Tire

Canadian Tire Corporation, Limited provides a range of retail goods and services in Canada. It operates in three segments: Retail, CT REIT, and Financial Services. The Retail segment retails automotive maintenance products and accessories, parts, and tires, as well as automotive services and roadside assistance; electrical, hardware, home environment, paint, plumbing, and tool products; cleaning, food & drink, home décor, home essentials, home organization, kitchen, and pet care products; camping, exercise, hockey, hunting, fishing, seasonal recreation, and team sports and golf products; and backyard living, backyard fun, cycling, gardening, outdoor tools, seasonal, and toy products. This segment offers its products under the Canadian Tire, Canadian Tire Gas, Pro Hockey Life, Mark's, PartSource, Helly Hansen, Party City, and SportChek brand names. This segment also participates in loyalty programs, as well as sells its products online. The CT REIT segment operates as a closed-end real estate investment trust that holds a portfolio of properties comprising Canadian Tire stores, Canadian Tire anchored retail developments, industrial properties, mixed-use commercial property, and development properties. The Financial Services segment provides consumer credit cards, in-store financing, insurance products, and retail and broker deposits; and savings accounts and guaranteed investment certificates. Canadian Tire Corporation, Limited was founded in 1922 and is headquartered in Toronto, Canada.