Tapestry (NYSE:TPR – Get Free Report) and Abercrombie & Fitch (NYSE:ANF – Get Free Report) are both retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their risk, dividends, valuation, institutional ownership, profitability, earnings and analyst recommendations.
Risk & Volatility
Tapestry has a beta of 1.43, suggesting that its share price is 43% more volatile than the S&P 500. Comparatively, Abercrombie & Fitch has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent ratings and recommmendations for Tapestry and Abercrombie & Fitch, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Tapestry | 0 | 4 | 15 | 2 | 2.90 |
| Abercrombie & Fitch | 1 | 4 | 8 | 0 | 2.54 |
Earnings and Valuation
This table compares Tapestry and Abercrombie & Fitch”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Tapestry | $7.01 billion | 4.14 | $183.20 million | $3.12 | 46.06 |
| Abercrombie & Fitch | $5.28 billion | 0.81 | $506.92 million | $10.42 | 9.22 |
Abercrombie & Fitch has lower revenue, but higher earnings than Tapestry. Abercrombie & Fitch is trading at a lower price-to-earnings ratio than Tapestry, indicating that it is currently the more affordable of the two stocks.
Dividends
Tapestry pays an annual dividend of $1.60 per share and has a dividend yield of 1.1%. Abercrombie & Fitch pays an annual dividend of $0.80 per share and has a dividend yield of 0.8%. Tapestry pays out 51.3% of its earnings in the form of a dividend. Abercrombie & Fitch pays out 7.7% 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. Tapestry has raised its dividend for 3 consecutive years. Tapestry is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional & Insider Ownership
90.8% of Tapestry shares are held by institutional investors. 1.3% of Tapestry shares are held by insiders. Comparatively, 2.3% of Abercrombie & Fitch shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Profitability
This table compares Tapestry and Abercrombie & Fitch’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Tapestry | 8.44% | 229.70% | 22.06% |
| Abercrombie & Fitch | 9.34% | 34.36% | 13.50% |
Summary
Tapestry beats Abercrombie & Fitch on 13 of the 18 factors compared between the two stocks.
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.
About Abercrombie & Fitch
Abercrombie & Fitch Co. engages in the retail of apparel, personal care products, and accessories. The firm operates through following geographical segments: Americas, EMEA and APAC. The Americas segment includes operations in North America and South America. The EMEA segment includes operations in Europe, the Middle East and Africa. The APAC segment includes operations in the Asia-Pacific region, including Asia and Oceania. The company was founded by David Abercrombie in 1892 and is headquartered in New Albany, OH.
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