Zumiez (NASDAQ:ZUMZ) vs. Burberry Group (OTCMKTS:BURBY) Critical Analysis

Burberry Group (OTCMKTS:BURBY) and Zumiez (NASDAQ:ZUMZ) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Earnings and Valuation

This table compares Burberry Group and Zumiez”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Burberry Group	$3.14 billion	1.85	-$95.68 million	N/A	N/A
Zumiez	$889.20 million	0.47	-$1.71 million	$0.48	51.90

Zumiez has lower revenue, but higher earnings than Burberry Group.

Analyst Recommendations

This is a breakdown of current ratings for Burberry Group and Zumiez, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Burberry Group	0	0	0	5	4.00
Zumiez	0	2	0	1	2.67

Zumiez has a consensus price target of $18.00, indicating a potential downside of 27.74%. Given Zumiez’s higher probable upside, analysts plainly believe Zumiez is more favorable than Burberry Group.

Risk & Volatility

Burberry Group has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500. Comparatively, Zumiez has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.

Profitability

This table compares Burberry Group and Zumiez’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Burberry Group	N/A	N/A	N/A
Zumiez	0.94%	2.33%	1.14%

Institutional and Insider Ownership

10.3% of Burberry Group shares are owned by institutional investors. Comparatively, 95.5% of Zumiez shares are owned by institutional investors. 21.2% of Zumiez shares are owned by company 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.

Summary

Zumiez beats Burberry Group on 7 of the 12 factors compared between the two stocks.

About Burberry Group

Burberry Group plc, together with its subsidiaries, manufactures, retails, and wholesales luxury goods under the Burberry brand. The company operates in two segments, Retail/Wholesale and Licensing. It provides womenswear, menswear, childrenswear, beauty, eyewear, shoes, and accessories, as well as leather goods, such as bags. The company also licenses third parties to manufacture and distribute products using the Burberry trademarks. It sells its products through Burberry mainline stores, concessions, outlets, digital commerce, Burberry franchisees, department stores, and multi-brand specialty accounts, as well as through Burberry.com website. It operates in the Asia Pacific, Europe, the Middle East, India, Africa, and the Americas. The company was founded in 1856 and is headquartered in London, the United Kingdom.

About Zumiez

Zumiez Inc. operates as a specialty retailer of apparel, footwear, accessories, and hardgoods for young men and women. The company provides hardgoods, including skateboards, snowboards, bindings, components, and other equipment. It operates stores in the United States, Canada, Europe, and Australia under the names of Zumiez, Blue Tomato, and Fast Times. It operates zumiez.com, zumiez.ca, blue-tomato.com, and fasttimes.com.au e-commerce websites. Zumiez Inc. was founded in 1978 and is headquartered in Lynnwood, Washington.