Analyzing Deckers Outdoor (NYSE:DECK) and Fossil Group (NASDAQ:FOSL)

Deckers Outdoor (NYSE:DECK) and Fossil Group (NASDAQ:FOSL) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for Deckers Outdoor and Fossil Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Deckers Outdoor	2	13	9	0	2.29
Fossil Group	1	1	2	0	2.25

Deckers Outdoor presently has a consensus target price of $117.16, suggesting a potential upside of 36.44%. Fossil Group has a consensus target price of $7.50, suggesting a potential upside of 45.63%. Given Fossil Group’s higher possible upside, analysts plainly believe Fossil Group is more favorable than Deckers Outdoor.

Valuation and Earnings

This table compares Deckers Outdoor and Fossil Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Deckers Outdoor	$5.47 billion	2.14	$1.02 billion	$7.05	12.18
Fossil Group	$1.00 billion	0.30	-$78.30 million	($1.28)	-4.02

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

Volatility and Risk

Deckers Outdoor has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, Fossil Group has a beta of 1.61, suggesting that its share price is 61% more volatile than the S&P 500.

Profitability

This table compares Deckers Outdoor and Fossil Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Deckers Outdoor	18.54%	41.51%	26.55%
Fossil Group	-7.09%	-59.76%	-7.53%

Institutional & Insider Ownership

97.8% of Deckers Outdoor shares are held by institutional investors. Comparatively, 61.1% of Fossil Group shares are held by institutional investors. 0.4% of Deckers Outdoor shares are held by company insiders. Comparatively, 3.8% of Fossil Group shares are held 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.

Summary

Deckers Outdoor beats Fossil Group on 11 of the 14 factors compared between the two stocks.

About Deckers Outdoor

Deckers Outdoor Corporation, together with its subsidiaries, designs, markets, and distributes footwear, apparel, and accessories for casual lifestyle use and high-performance activities in the United States and internationally. The company offers premium footwear, apparel, and accessories under the UGG brand name; footwear, apparel, and accessories for ultra-runners and athletes under the HOKA brand name; and sandals, shoes, and boots under the Teva brand name. It also provides relaxed casual shoes and sandals under the Sanuk brand name; casual footwear fashion line under the Koolaburra brand name; and footwear under the AHNU brand name. The company sells its products through domestic and international retailers; international distributors; and directly to its consumers through its direct-to-consumer business, which includes e-commerce websites and retail stores. Deckers Outdoor Corporation was founded in 1973 and is headquartered in Goleta, California.

About Fossil Group

Fossil Group, Inc., together with its subsidiaries, designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. The company’s products include traditional watches, smartwatches, jewelry, handbags, small leather goods, belts, and sunglasses. It also manufactures and distributes private label brands, as well as branded products purchased for resell in other branded retail stores. The company offers its products under its proprietary brands, such as FOSSIL, SKAGEN, MICHELE, RELIC, and ZODIAC; and under the licensed brands, including ARMANI EXCHANGE, DIESEL, DKNY, EMPORIO ARMANI, KATE SPADE NEW YORK, MICHAEL KORS, TORY BURCH, and Skechers. The company sells its products through company-owned retail and outlet stores, department and specialty retail stores, mass market stores, e-commerce sites, licensed and franchised FOSSIL retail stores, and retail concessions, as well as sells its products on airlines. The company was formerly known as Fossil, Inc. and changed its name to Fossil Group, Inc. in May 2013. Fossil Group, Inc. was founded in 1984 and is headquartered in Richardson, Texas.