Michael Kors Holdings Limited (NYSE: KORS) and Kate Spade & Co (NYSE:KATE) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, earnings, profitabiliy, institutional ownership and valuation.

Profitability

This table compares Michael Kors Holdings Limited and Kate Spade & Co’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Michael Kors Holdings Limited 12.38% 41.00% 26.58%
Kate Spade & Co 0.44% 1.11% 0.43%

Insider & Institutional Ownership

84.9% of Michael Kors Holdings Limited shares are held by institutional investors. Comparatively, 97.9% of Kate Spade & Co shares are held by institutional investors. 6.0% of Michael Kors Holdings Limited shares are held by insiders. Comparatively, 0.8% of Kate Spade & Co shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Michael Kors Holdings Limited and Kate Spade & Co, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Michael Kors Holdings Limited 2 20 3 0 2.04
Kate Spade & Co 1 13 1 0 2.00

Michael Kors Holdings Limited currently has a consensus target price of $41.18, indicating a potential downside of 10.04%. Kate Spade & Co has a consensus target price of $20.04, indicating a potential upside of 8.39%. Given Kate Spade & Co’s higher possible upside, analysts clearly believe Kate Spade & Co is more favorable than Michael Kors Holdings Limited.

Risk & Volatility

Michael Kors Holdings Limited has a beta of 0.1, suggesting that its share price is 90% less volatile than the S&P 500. Comparatively, Kate Spade & Co has a beta of 1.75, suggesting that its share price is 75% more volatile than the S&P 500.

Earnings & Valuation

This table compares Michael Kors Holdings Limited and Kate Spade & Co’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Michael Kors Holdings Limited $4.49 billion 1.59 $1.12 billion $3.25 14.09
Kate Spade & Co N/A N/A N/A $1.11 16.66

Michael Kors Holdings Limited has higher revenue and earnings than Kate Spade & Co. Michael Kors Holdings Limited is trading at a lower price-to-earnings ratio than Kate Spade & Co, indicating that it is currently the more affordable of the two stocks.

Summary

Michael Kors Holdings Limited beats Kate Spade & Co on 8 of the 11 factors compared between the two stocks.

About Michael Kors Holdings Limited

Michael Kors Holdings Limited is a designer, marketer, distributor and retailer of branded women’s apparel and accessories and men’s apparel bearing the Michael Kors tradename and related trademarks MICHAEL KORS, MICHAEL MICHAEL KORS, and various other related trademarks and logos. The Company operates through three segments: retail, wholesale and licensing. The Retail operations consist of collection stores and lifestyle stores, including concessions and outlet stores, located primarily in the Americas (the United States, Canada and Latin America), Europe and Asia, as well as e-commerce. Wholesale revenues are principally derived from major department and specialty stores located throughout the Americas, Europe and Asia. The Company licenses its trademarks on products, such as fragrances, beauty, eyewear, leather goods, jewelry, watches, coats, men’s suits, swimwear, furs and ties, as well as through geographic licenses.

About Kate Spade & Co

Kate Spade & Company is engaged in the design and marketing of a range of accessories and apparel. It operates through three segments. The KATE SPADE North America segment consists of the Company’s kate spade new york and JACK SPADE brands in North America. The KATE SPADE International segment consists of the Company’s kate spade new york and JACK SPADE brands in international markets, which operates principally in Japan, Asia (excluding Japan), Europe and Latin America). The Adelington Design Group segment primarily consists of exclusive arrangements to supply jewelry for the LIZ CLAIBORNE and MONET brands. In addition, the Adelington Design Group segment serves J.C. Penney Corporation, Inc. (JCPenney) through exclusive supplier agreements for the LIZ CLAIBORNE and MONET jewelry lines. As of December 31, 2016, it operated 98 the United States Specialty Retail Stores; 35 Foreign Specialty Retail Stores; 65 the United States Outlet Stores; 17 Foreign Outlet Stores, and 54 Concessions.

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