Reviewing Tapestry (NYSE:TPR) & Kontoor Brands (NYSE:KTB)

Kontoor Brands (NYSE:KTB) and Tapestry (NYSE:TPR) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kontoor Brands	$3.15 billion	1.16	$227.45 million	$4.79	13.95
Tapestry	$8.00 billion	2.95	$1.53 billion	$7.29	16.24

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

Risk & Volatility

Kontoor Brands has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, Tapestry has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500.

Dividends

Kontoor Brands pays an annual dividend of $2.12 per share and has a dividend yield of 3.2%. Tapestry pays an annual dividend of $1.85 per share and has a dividend yield of 1.6%. Kontoor Brands pays out 44.3% of its earnings in the form of a dividend. Tapestry pays out 25.4% 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. Kontoor Brands has increased its dividend for 1 consecutive years and Tapestry has increased its dividend for 3 consecutive years.

Institutional & Insider Ownership

93.1% of Kontoor Brands shares are owned by institutional investors. Comparatively, 90.8% of Tapestry shares are owned by institutional investors. 1.8% of Kontoor Brands shares are owned by insiders. Comparatively, 1.3% of Tapestry shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Kontoor Brands and Tapestry, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kontoor Brands	1	4	6	1	2.58
Tapestry	0	4	15	2	2.90

Kontoor Brands currently has a consensus target price of $95.00, indicating a potential upside of 42.19%. Tapestry has a consensus target price of $175.12, indicating a potential upside of 47.92%. Given Tapestry’s stronger consensus rating and higher probable upside, analysts clearly believe Tapestry is more favorable than Kontoor Brands.

Profitability

This table compares Kontoor Brands and Tapestry’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kontoor Brands	8.21%	59.71%	12.94%
Tapestry	19.09%	254.95%	22.75%

Summary

Tapestry beats Kontoor Brands on 15 of the 18 factors compared between the two stocks.

About Kontoor Brands

Kontoor Brands, Inc., a lifestyle apparel company, designs, produces, procures, markets, distributes, and licenses denim, apparel, footwear, and accessories, primarily under the Wrangler and Lee brands. The company operates through two segments: Wrangler and Lee. It licenses and sells apparel under the Rock & Republic brand name. The company sells its products primarily through mass merchants, specialty stores, mid-tier and traditional department stores, company-operated stores, and online. It operates in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific regions. Kontoor Brands, Inc. was incorporated in 2018 and is headquartered in Greensboro, North Carolina.

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.