Financial Analysis: GAP (NYSE:GAP) & Esprit (OTCMKTS:ESPGY)

Esprit (OTCMKTS:ESPGY) and GAP (NYSE:GAP) are both retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, profitability, earnings, institutional ownership and risk.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Esprit and GAP, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Esprit	0	0	0	0	0.00
GAP	0	8	8	2	2.67

GAP has a consensus price target of $28.00, indicating a potential upside of 48.40%. Given GAP’s stronger consensus rating and higher probable upside, analysts clearly believe GAP is more favorable than Esprit.

Profitability

This table compares Esprit and GAP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Esprit	N/A	N/A	N/A
GAP	6.25%	21.13%	6.23%

Insider & Institutional Ownership

58.8% of GAP shares are owned by institutional investors. 31.0% of GAP shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Esprit and GAP”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Esprit	$5.38 million	0.39	-$157.30 million	N/A	N/A
GAP	$15.37 billion	0.44	$816.00 million	$2.54	7.43

GAP has higher revenue and earnings than Esprit.

Dividends

Esprit pays an annual dividend of $0.09 per share and has a dividend yield of 62.7%. GAP pays an annual dividend of $0.70 per share and has a dividend yield of 3.7%. GAP pays out 27.6% of its earnings in the form of a dividend. GAP has increased its dividend for 1 consecutive years.

Summary

GAP beats Esprit on 13 of the 15 factors compared between the two stocks.

About Esprit

Esprit Holdings Limited, an investment holding company, engages in retail and wholesale distribution, and licensing of fashion and non-apparel products. It operates through Europe; Asia; E-shop; and Corporate Services, Sourcing, Licensing and Others segments. The company offers apparel and accessories under the ESPRIT brand name through retail stores and e-commerce platforms. It is also involved in the sourcing, purchasing, distributing, and sale of merchandise; provision of financial and treasury services, as well as logistic services comprising customs dealing and quality control; design and image directions; and conceptualization and development of global uniform image businesses. Esprit Holdings Limited was founded in 1968 and is headquartered in North Point, Hong Kong.

About GAP

Gap, Inc. operates as a global apparel retail company, which offers clothing, apparel, accessories, and personal care products for men, women, and children. The firm operates through the following segments: Gap Global, Old Navy Global, Banana Republic Global, Athleta, and Other. The Gap Global segment includes apparel and accessories for men and women under the Gap brand, along with the GapKids, BabyGap, GapMaternity, GapBody, and GapFit collections. The Old Navy Global segment offers clothing and accessories for adults and children. The Banana Republic Global segment provides clothing, eyewear, jewelry, shoes, handbags, and fragrances. The Athleta segment offers fitness apparel for women. The company founded by Donald G. Fisher and Doris F. Fisher in July 1969 and is headquartered in San Francisco, CA.