Analyzing Crocs (NASDAQ:CROX) and Tapestry (NYSE:TPR)

Tapestry (NYSE:TPR) and Crocs (NASDAQ:CROX) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, valuation and risk.

Insider and Institutional Ownership

90.8% of Tapestry shares are owned by institutional investors. Comparatively, 93.4% of Crocs shares are owned by institutional investors. 1.3% of Tapestry shares are owned by insiders. Comparatively, 3.1% of Crocs shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Tapestry	19.09%	254.95%	22.75%
Crocs	14.64%	47.75%	15.20%

Earnings and Valuation

This table compares Tapestry and Crocs”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tapestry	$8.00 billion	2.75	$1.53 billion	$7.29	15.14
Crocs	$4.04 billion	1.41	-$81.20 million	$11.57	10.31

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

Analyst Recommendations

This is a summary of current ratings and price targets for Tapestry and Crocs, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tapestry	0	4	15	2	2.90
Crocs	1	6	11	1	2.63

Tapestry currently has a consensus price target of $171.56, indicating a potential upside of 55.48%. Crocs has a consensus price target of $141.20, indicating a potential upside of 18.43%. Given Tapestry’s stronger consensus rating and higher possible upside, analysts clearly believe Tapestry is more favorable than Crocs.

Risk & Volatility

Tapestry has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500. Comparatively, Crocs has a beta of 1.56, meaning that its stock price is 56% more volatile than the S&P 500.

Summary

Tapestry beats Crocs on 11 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 Crocs

Crocs, Inc., together with its subsidiaries, designs, develops, manufactures, markets, distributes, and sells casual lifestyle footwear and accessories for men, women, and children under Crocs and HEYDUDE Brand in the United States and internationally. The company offers various footwear products, including clogs, sandals, slides, flips, wedges, platforms, socks, boots, charms, flip flops, sneakers, and slippers. It sells its products through wholesalers, retail stores, e-commerce sites, third-party marketplaces, and kiosks/store-in-store locations. Crocs, Inc. was founded in 1999 and is headquartered in Broomfield, Colorado.