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The CatoCATO -2.39%65 Forward Rate of Return (Yacktman) % is % as of Jul. 2026. GuruFocus rates CATO with a GF Score™ of 65/100 and a GF Value™ of $3.63 (Significantly Undervalued). The stock has 2 warning signs investors should review. Among 794 Retail - Cyclical companies, The Cato ranks better than 95.47% on this metric.
Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. The Cato's forward rate of return for was %.
The historical rank and industry rank for The Cato's Forward Rate of Return (Yacktman) % or its related term are showing as below:
CATO'
s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: -12.98 Med: -5.42 Max: 61.27
Current: 61.27
During the past 13 years, The Cato's highest Forward Rate of Return was 61.27. The lowest was -12.98. And the median was -5.42.
CATO's Forward Rate of Return (Yacktman) % is ranked better than 95.47% of 794
companies
in the Retail - Cyclical industry
Industry Median: 13.08
vs CATO: 61.27
Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
The Cato (NYSE:CATO) Forward Rate of Return (Yacktman) % Explanation
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
The Cato Forward Rate of Return (Yacktman) % Related Terms
The Cato Forward Rate of Return (Yacktman) % Historical Data
* Premium members only.
The historical data trend for The Cato's Forward Rate of Return (Yacktman) % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
The Cato Forward Rate of Return (Yacktman) % Chart
CATO vs LVLU, BRIA, DXLG: Forward Rate of Return (Yacktman) % Comparison
For the Apparel Retail subindustry, The Cato's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
The Cato Forward Rate of Return (Yacktman) % vs Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, The Cato's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where The Cato's Forward Rate of Return (Yacktman) % falls into.
The Cato Forward Rate of Return (Yacktman) % Calculation
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
What does a Forward Rate of Return (Yacktman) % of % mean?
The Cato (CATO) has a Forward Rate of Return (Yacktman) % of % as of Jul. 2026. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on The Cato and its competitors. According to the industry distribution chart, The Cato ranks #36 out of 794 companies in the Retail - Cyclical industry, placing it in the top 4.5%.
Is The Cato's Forward Rate of Return (Yacktman) % too high?
The Cato's current Forward Rate of Return (Yacktman) % is %. Based on the distribution chart, The Cato ranks #36 out of 794 companies in the Retail - Cyclical industry, which is in the top quartile — a strong position relative to peers. Overall, The Cato has a GF Score™ of 65/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does The Cato's Forward Rate of Return (Yacktman) % compare to LVLU and BRIA?
According to the Retail - Cyclical industry distribution chart, The Cato ranks #36 out of 794 companies for Forward Rate of Return (Yacktman) %. This places The Cato in the top 5% of its industry — outperforming the majority of peers. The industry median Forward Rate of Return (Yacktman) % is 13.08. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Forward Rate of Return (Yacktman) % for a Retail - Cyclical company?
The median Forward Rate of Return (Yacktman) % among Retail - Cyclical companies is 13.08, based on 794 companies in the industry. Companies in the top quartile (top 25%) have a Forward Rate of Return (Yacktman) % significantly above this median, while those in the bottom quartile fall well below. However, Forward Rate of Return (Yacktman) % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Forward Rate of Return (Yacktman) % mean?
A high Forward Rate of Return (Yacktman) % can signal that a stock is expensive relative to its fundamentals. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on The Cato and its competitors. For the Retail - Cyclical industry, the median Forward Rate of Return (Yacktman) % is 13.08 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. The Cato's current Forward Rate of Return (Yacktman) % is %. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is The Cato stock overvalued right now?
Based on GuruFocus' analysis, The Cato (CATO) is currently considered Significantly Undervalued. The stock's GF Value™ is $3.63, compared to a current price of $2.45 — trading 32.5% below its estimated fair value. The current Forward Rate of Return (Yacktman) % is %. The Cato's overall GF Score™ is 65/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Forward Rate of Return (Yacktman) % calculated?
Forward Rate of Return (Yacktman) % is calculated from a company's financial statements. For The Cato (CATO), the current Forward Rate of Return (Yacktman) % is % as of Jul. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is The Cato (CATO) Overvalued in 2026?
Based on GuruFocus' analysis, The Cato stock appears to be undervalued.
The current stock price of $2.45 is trading 32.5% below its estimated GF Value™ of $3.63.
GuruFocus considers The Cato to be Significantly Undervalued.
Key valuation signals for CATO:
Forward Rate of Return (Yacktman) %: %
GF Value™: $3.63 vs. price of $2.45 (32.5% below fair value)
No single metric tells the full story. See the CATO stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
The Cato Corp seeks to offer quality fashion apparel and accessories at low prices every day, in junior/missy and plus sizes. The Cato concept's stores and e-commerce website feature a broad assortment of apparel and accessories, including dressy, career, and casual sportswear, dresses, coats, shoes, lingerie, costume jewelry, and handbags. Management believes the Company's success is dependent upon its ability to differentiate its stores from department stores, mass merchandise discount stores, and competing specialty stores. The key elements of the Company's business are: Merchandise Assortment, Value Pricing, Strip Shopping Center Location, Customer Service, Credit and Layaway Programs.
65GF Score
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