Analyzing GAP (NYSE:GAP) and Industria de Diseno Textil (OTCMKTS:IDEXY)

Industria de Diseno Textil (OTCMKTS:IDEXY) and GAP (NYSE:GAP) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.

Risk & Volatility

Industria de Diseno Textil has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, GAP has a beta of 2.29, meaning that its stock price is 129% more volatile than the S&P 500.

Valuation & Earnings

This table compares Industria de Diseno Textil and GAP”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Industria de Diseno Textil	$45.09 billion	3.99	$7.04 billion	$0.57	25.30
GAP	$15.37 billion	0.58	$816.00 million	$2.15	11.11

Industria de Diseno Textil has higher revenue and earnings than GAP. GAP is trading at a lower price-to-earnings ratio than Industria de Diseno Textil, indicating that it is currently the more affordable of the two stocks.

Dividends

Industria de Diseno Textil pays an annual dividend of $0.29 per share and has a dividend yield of 2.0%. GAP pays an annual dividend of $0.66 per share and has a dividend yield of 2.8%. Industria de Diseno Textil pays out 50.9% of its earnings in the form of a dividend. GAP pays out 30.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. GAP has raised its dividend for 1 consecutive years. GAP is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

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

Analyst Recommendations

This is a summary of current recommendations for Industria de Diseno Textil and GAP, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Industria de Diseno Textil	0	1	1	4	3.50
GAP	0	5	10	2	2.82

GAP has a consensus price target of $30.62, suggesting a potential upside of 28.12%. Given GAP’s higher possible upside, analysts clearly believe GAP is more favorable than Industria de Diseno Textil.

Profitability

This table compares Industria de Diseno Textil and GAP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Industria de Diseno Textil	15.61%	35.01%	17.82%
GAP	5.31%	22.98%	6.70%

About Industria de Diseno Textil

Industria de Diseño Textil, S.A. engages in the retail and online distribution of clothing, footwear, accessories, and household products. The company sells its products under the Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, and Zara Home brands. It is also involved in the textile manufacturing, logistics, design, insurance, construction, and real estate businesses, as well as provides financial services. The company operates in Spain, rest of Europe, the Americas, Asia, and internationally. Industria de Diseño Textil, S.A. was founded in 1963 and is headquartered in A Coruña, Spain.

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.