Financial Review: Birkenstock (NYSE:BIRK) and Tapestry (NYSE:TPR)

Tapestry (NYSE:TPR) and Birkenstock (NYSE:BIRK) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Risk and Volatility

Tapestry has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500. Comparatively, Birkenstock has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Tapestry and Birkenstock, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tapestry	0	4	15	2	2.90
Birkenstock	0	6	13	0	2.68

Tapestry presently has a consensus price target of $175.12, suggesting a potential upside of 54.10%. Birkenstock has a consensus price target of $52.79, suggesting a potential upside of 67.86%. Given Birkenstock’s higher probable upside, analysts clearly believe Birkenstock is more favorable than Tapestry.

Valuation and Earnings

This table compares Tapestry and Birkenstock”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tapestry	$8.00 billion	2.83	$1.53 billion	$7.29	15.59
Birkenstock	$2.32 billion	2.41	$385.46 million	$2.13	14.77

Tapestry has higher revenue and earnings than Birkenstock. Birkenstock is trading at a lower price-to-earnings ratio than Tapestry, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Tapestry and Birkenstock’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tapestry	19.09%	254.95%	22.75%
Birkenstock	14.82%	13.36%	7.21%

Institutional and Insider Ownership

90.8% of Tapestry shares are held by institutional investors. Comparatively, 19.9% of Birkenstock shares are held by institutional investors. 1.3% of Tapestry shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Tapestry beats Birkenstock on 14 of the 15 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 Birkenstock

Birkenstock Holding plc manufactures and sells footwear products. It also offers sandals, shoes, closed-toe silhouettes, skincare products, and accessories. The company sells its products through e-commerce sites and a network of owned retail stores, as well as business-to-business channels. It operates in the United States, Brazil, Canada, Mexico, Europe, APMA, and internationally. Birkenstock Holding plc was founded in 1774 and is based in London, the United Kingdom. Birkenstock Holding plc is a subsidiary of BK LC Lux MidCo S.à r.l.