Tapestry (NYSE:TPR) vs. Movado Group (NYSE:MOV) Critical Analysis

Tapestry (NYSE:TPR) and Movado Group (NYSE:MOV) are both consumer cyclical companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitability and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Tapestry	13.15%	39.78%	9.64%
Movado Group	6.09%	8.18%	5.47%

Analyst Recommendations

This is a summary of recent ratings and target prices for Tapestry and Movado Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tapestry	0	5	9	0	2.64
Movado Group	0	0	1	0	3.00

Tapestry presently has a consensus target price of $46.13, suggesting a potential upside of 13.85%. Movado Group has a consensus target price of $41.00, suggesting a potential upside of 69.28%. Given Movado Group’s stronger consensus rating and higher possible upside, analysts clearly believe Movado Group is more favorable than Tapestry.

Dividends

Tapestry pays an annual dividend of $1.40 per share and has a dividend yield of 3.5%. Movado Group pays an annual dividend of $1.40 per share and has a dividend yield of 5.8%. Tapestry pays out 37.0% of its earnings in the form of a dividend. Movado Group pays out 78.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

90.8% of Tapestry shares are held by institutional investors. Comparatively, 72.1% of Movado Group shares are held by institutional investors. 0.9% of Tapestry shares are held by insiders. Comparatively, 30.1% of Movado Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Tapestry and Movado Group’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tapestry	$6.67 billion	1.40	$936.00 million	$3.78	10.72
Movado Group	$664.37 million	0.81	$46.71 million	$1.79	13.53

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

Volatility & Risk

Tapestry has a beta of 1.59, meaning that its stock price is 59% more volatile than the S&P 500. Comparatively, Movado Group has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500.

Summary

Tapestry beats Movado Group on 11 of the 16 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 Movado Group

Movado Group, Inc. designs, sources, markets, and distributes watches in the United States and internationally. The company operates in two segments, Watch and Accessory Brands, and Company Stores. The company offers its watches under the Movado, Concord, Ebel, Olivia Burton, and MVMT brands, as well as licensed brands comprising Coach, Tommy Hilfiger, HUGO BOSS, Lacoste, and Calvin Klein. It also designs, sources, markets, and distributes jewelry and other accessories; and provides after-sales and shipping services. The company’s customers include jewelry store chains, department stores, independent regional jewelers, network of independent distributors, online marketplaces, licensors’ retail stores, and third-party e-commerce retailers. It sells directly to consumers through its e-commerce platforms. The company was formerly known as North American Watch Corporation and changed its name to Movado Group, Inc. in 1996. Movado Group, Inc. was founded in 1961 and is headquartered in Paramus, New Jersey.