Tumi Holdings (NYSE: TUMI) and Ralph Lauren Corporation (NYSE:RL) are both cyclical consumer goods & services companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, profitabiliy, analyst recommendations, institutional ownership, dividends, valuation and risk.

Profitability

This table compares Tumi Holdings and Ralph Lauren Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tumi Holdings 8.95% 10.52% 8.26%
Ralph Lauren Corporation -1.49% 13.57% 8.02%

Analyst Ratings

This is a summary of current ratings and recommmendations for Tumi Holdings and Ralph Lauren Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tumi Holdings 0 0 0 0 N/A
Ralph Lauren Corporation 2 15 3 0 2.05

Ralph Lauren Corporation has a consensus price target of $85.07, indicating a potential upside of 13.61%. Given Ralph Lauren Corporation’s higher possible upside, analysts clearly believe Ralph Lauren Corporation is more favorable than Tumi Holdings.

Insider and Institutional Ownership

58.0% of Ralph Lauren Corporation shares are held by institutional investors. 32.9% of Ralph Lauren Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Ralph Lauren Corporation pays an annual dividend of $2.00 per share and has a dividend yield of 2.7%. Tumi Holdings does not pay a dividend. Ralph Lauren Corporation pays out -163.9% of its earnings in the form of a dividend. Ralph Lauren Corporation has increased its dividend for 5 consecutive years.

Valuation & Earnings

This table compares Tumi Holdings and Ralph Lauren Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tumi Holdings N/A N/A N/A N/A N/A
Ralph Lauren Corporation $6.65 billion 0.91 $983.00 million ($1.22) -61.38

Ralph Lauren Corporation has higher revenue and earnings than Tumi Holdings.

Summary

Ralph Lauren Corporation beats Tumi Holdings on 9 of the 11 factors compared between the two stocks.

Tumi Holdings Company Profile

Tumi Holdings, Inc. (Tumi) offers a line of travel and business products and accessories in multiple categories. The Company operates through four segments: Direct-to-Consumer North America, which sells its products directly to consumers through a network of approximately 150 company-owned retail stores consisting of full-price stores and outlet stores; Direct-to-Consumer International, which sells its products directly to consumers through a network of over 20 company-owned full-price and outlet stores in street venues and select malls in international locations; Indirect-to-Consumer North America, which sells its products to wholesale customers in North America through approximately 800 doors, including specialty luggage retailers, prestige department stores and business-to-business channels, and Indirect-to-Consumer International, which sells its products to international wholesale customers through approximately 1,000 doors.

Ralph Lauren Corporation Company Profile

Ralph Lauren Corporation is engaged in the design, marketing and distribution of lifestyle products, including apparel, accessories, home furnishings and other licensed product categories. The Company operates through three segments: Wholesale, Retail and Licensing. Wholesale business consists of sales made to department stores and specialty stores around the world. Retail business consists of sales made directly to consumers through retail channel, which includes Company’s’ retail stores, concession-based shop-within-shops and e-commerce operations around the world. Licensing business consists of royalty-based arrangements, under which the Company licenses to unrelated third parties for specified periods the right to operate retail stores and/or to use its various trademarks in connection with the manufacture and sale of designated products, such as certain apparel, eyewear, fragrances and home furnishings.

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