The Swatch Group (OTCMKTS:SWGNF – Get Free Report) and Tapestry (NYSE:TPR – Get Free Report) are both consumer cyclical companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, risk, institutional ownership, valuation, dividends and earnings.
Profitability
This table compares The Swatch Group and Tapestry’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
The Swatch Group | N/A | N/A | N/A |
Tapestry | 13.15% | 39.78% | 9.64% |
Earnings & Valuation
This table compares The Swatch Group and Tapestry’s revenue, earnings per share and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
The Swatch Group | N/A | N/A | N/A | $6.69 | 6.43 |
Tapestry | $6.70 billion | 1.39 | $936.00 million | $3.78 | 10.69 |
Dividends
The Swatch Group pays an annual dividend of $1.50 per share and has a dividend yield of 3.5%. Tapestry pays an annual dividend of $1.40 per share and has a dividend yield of 3.5%. The Swatch Group pays out 22.4% of its earnings in the form of a dividend. Tapestry pays out 37.0% 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. The Swatch Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
5.1% of The Swatch Group shares are owned by institutional investors. Comparatively, 90.8% of Tapestry shares are owned by institutional investors. 0.9% of Tapestry shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of recent recommendations for The Swatch Group and Tapestry, as reported by MarketBeat.com.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
The Swatch Group | 0 | 0 | 0 | 0 | N/A |
Tapestry | 0 | 5 | 10 | 0 | 2.67 |
Tapestry has a consensus price target of $47.00, indicating a potential upside of 16.34%. Given Tapestry’s higher probable upside, analysts plainly believe Tapestry is more favorable than The Swatch Group.
Summary
Tapestry beats The Swatch Group on 9 of the 12 factors compared between the two stocks.
About The Swatch Group
The Swatch Group AG designs, manufactures, and sells finished watches, jewelry, and watch movements and components worldwide. The company operates through Watches & Jewelry and Electronic Systems segments. The Watches & Jewelry segment designs, produces, and commercializes watches and jewelry. The Electronic Systems segment engages in the design, production, and commercialization of electronic components, as well as sports timing activities. It is also involved in the provision of assembly, research and development, administration, polishing, logistics and distribution, and customer services; and hard material products, microelectronics, watch cases and crowns, miniature low-frequency quartz crystals, thin wires, miniature batteries, watch dials, watch hands, bracelets, sports timing technology and equipment, precision parts, and assembly electronic components. In addition, the company engages in retail, communication, real estate, real estate management, finance, reinsurance, and art center businesses. It offers its watch and jewelry products primarily under the Breguet, Harry Winston, Blancpain, Glashütte Original, Jaquet Droz, Léon Hatot, Omega, Longines, Rado, Union Glashütte, Tissot, Balmain, Certina, Mido, Hamilton, Swatch, and Flik Flak brands. The Swatch Group AG was founded in 1983 and is headquartered in Biel/Bienne, Switzerland.
About Tapestry
Tapestry, Inc. provides luxury accessories and branded lifestyle products in the United States, Japan, Greater China, and internationally. The company operates in three segments: Coach, Kate Spade, and Stuart Weitzman. It offers women’s handbags; and women’s accessories, such as small leather goods which includes mini and micro handbags, money pieces, wristlets, pouches, and cosmetic cases, as well as novelty accessories including address books, time management and travel accessories, sketchbooks, and portfolios; and belts, key rings, and charms. The company also provides men products, which includes bag collections, such as business cases, computer bags, messenger-style bags, backpacks, and totes; small leather goods including wallets, card cases, travel organizers, and belts; and footwear, watches, fragrances, sunglasses, novelty accessories, and ready-to-wear items. In addition, it offers other products including women’s footwear and fragrances; eyewear and sunglasses; and jewelry, such as bracelets, necklaces, rings, and earrings, watches, and other women’s seasonal lifestyle apparel collections, including outerwear, ready-to-wear and cold weather accessories, such as gloves, scarves, and hats. Further, the company provides kids items, housewares, and home accessories, such as fashion bedding and tableware, stationery, and gifts. It offers its products through e-commerce sites and concession shop-in-shops, wholesale, and third-party distributors under the Coach, Kate Spade, and Stuart Weitzman brand names. The company was formerly known as Coach, Inc. and changed its name to Tapestry, Inc. in October 2017. Tapestry, Inc. was founded in 1941 and is headquartered in New York, New York.
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