Critical Survey: NIKE (NYSE:NKE) vs. Capri (NYSE:CPRI)

Capri (NYSE:CPRI) and NIKE (NYSE:NKE) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, valuation, profitability and institutional ownership.

Risk and Volatility

Capri has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, NIKE has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500.

Profitability

This table compares Capri and NIKE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capri	4.44%	297.36%	5.12%
NIKE	6.74%	15.94%	6.15%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Capri and NIKE, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capri	1	9	5	1	2.38
NIKE	10	21	7	1	1.97

Capri currently has a consensus price target of $21.93, suggesting a potential upside of 49.26%. NIKE has a consensus price target of $41.19, suggesting a potential upside of 19.04%. Given Capri’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Capri is more favorable than NIKE.

Institutional & Insider Ownership

84.3% of Capri shares are held by institutional investors. Comparatively, 64.2% of NIKE shares are held by institutional investors. 2.6% of Capri shares are held by insiders. Comparatively, 1.1% of NIKE shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Capri and NIKE”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capri	$3.47 billion	0.48	$137.00 million	$1.30	11.30
NIKE	$46.40 billion	1.11	$3.11 billion	$2.08	16.64

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

Summary

NIKE beats Capri on 8 of the 14 factors compared between the two stocks.

About Capri

Capri Holdings Limited designs, markets, distributes, and retails branded women's and men's apparel, footwear, and accessories in the United States, Canada, Latin America, Europe, the Middle East, Africa, and Asia. It operates through three segments: Versace, Jimmy Choo, and Michael Kors. The company offers ready-to-wear, accessories, footwear, handbags, scarves and belts, small leather goods, eyewear, watches, jewelry, fragrances, and home furnishings through a distribution network, including boutiques, department, and specialty stores, as well as through e-commerce sites. It also engages in licensing agreements to the manufacture and sale of watches, jewelry, eyewear, and fragrances. The company was formerly known as Michael Kors Holdings Limited and changed its name to Capri Holdings Limited in December 2018. Capri Holdings Limited was founded in 1981 and is headquartered in London, the United Kingdom.

About NIKE

NIKE, Inc., together with its subsidiaries, designs, develops, markets, and sells athletic footwear, apparel, equipment, accessories, and services worldwide. The company provides athletic and casual footwear, apparel, and accessories under the Jumpman trademark; and casual sneakers, apparel, and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron, and Jack Purcell trademarks. It also sells a line of performance equipment and accessories comprising bags, sport balls, socks, eyewear, timepieces, digital devices, bats, gloves, protective equipment, and other equipment for sports activities under the NIKE brand; and various plastic products to other manufacturers. In addition, the company markets apparel with licensed college and professional team, and league logos, as well as sells sports apparel; and licenses unaffiliated parties to manufacture and sell apparel, digital devices, and applications and other equipment for sports activities under NIKE-owned trademarks. It sells its products to footwear stores; sporting goods stores; athletic specialty stores; department stores; skate, tennis, and golf shops; and other retail accounts through NIKE-owned retail stores, digital platforms, independent distributors, licensees, and sales representatives. NIKE, Inc. was founded in 1964 and is headquartered in Beaverton, Oregon.