Head-To-Head Survey: Ralph Lauren (NYSE:RL) & Tefron (OTCMKTS:TFRFF)

Tefron (OTCMKTS:TFRFF) and Ralph Lauren (NYSE:RL) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Valuation and Earnings

This table compares Tefron and Ralph Lauren”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tefron	$293.86 million	0.27	$15.11 million	$0.40	16.08
Ralph Lauren	$7.08 billion	3.10	$742.90 million	$13.53	26.79

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Tefron and Ralph Lauren, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tefron	0	0	0	0	0.00
Ralph Lauren	1	5	15	1	2.73

Ralph Lauren has a consensus price target of $357.44, suggesting a potential downside of 1.37%. Given Ralph Lauren’s stronger consensus rating and higher possible upside, analysts clearly believe Ralph Lauren is more favorable than Tefron.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Tefron	2.14%	6.85%	3.52%
Ralph Lauren	11.28%	36.18%	12.66%

Insider & Institutional Ownership

67.9% of Ralph Lauren shares are held by institutional investors. 53.3% of Tefron shares are held by insiders. Comparatively, 38.3% of Ralph Lauren 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.

Volatility and Risk

Tefron has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, Ralph Lauren has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500.

Dividends

Tefron pays an annual dividend of $0.12 per share and has a dividend yield of 1.9%. Ralph Lauren pays an annual dividend of $3.65 per share and has a dividend yield of 1.0%. Tefron pays out 30.0% of its earnings in the form of a dividend. Ralph Lauren pays out 27.0% 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. Ralph Lauren has raised its dividend for 5 consecutive years.

Summary

Ralph Lauren beats Tefron on 16 of the 18 factors compared between the two stocks.

About Tefron

Tefron Ltd. engages in the design, development, production, marketing, and sale of intimate apparel and activewear, and leisurewear worldwide. The company through Brands and Retail segments. It offers women’s intimate, and active and lounge wear; and men’s underwear, activewear, and baselayer products. Tefron Ltd. was incorporated in 1977 and is headquartered in Misgav, Israel.

About Ralph Lauren

Ralph Lauren Corporation designs, markets, and distributes lifestyle products in North America, Europe, Asia, and internationally. The company offers apparel, including a range of men’s, women’s, and children’s clothing; footwear and accessories, which comprise casual shoes, dress shoes, boots, sneakers, sandals, eyewear, watches, fashion and fine jewelry, scarves, hats, gloves, and umbrellas, as well as leather goods, such as handbags, luggage, small leather goods, and belts; home products consisting of bed and bath lines, furniture, fabric and wallcoverings, floor coverings, lighting, tabletop, kitchen linens, floor coverings, dining, decorative accessories, and giftware; and fragrances. It sells apparel and accessories under the Ralph Lauren Collection, Ralph Lauren Purple Label, Polo Ralph Lauren, Double RL, Lauren Ralph Lauren, Polo Golf Ralph Lauren, Ralph Lauren Golf, RLX Ralph Lauren, Polo Ralph Lauren Children, and Chaps brands; women’s fragrances under the Ralph Lauren Collection, Woman by Ralph Lauren, Romance Collection, and Ralph Collection brand names; and men’s fragrances under the Ralph’s Club, Purple Label, Polo Blue, Polo Red, Polo Green, Polo Black, Polo 67, Safari, Polo Sport, and Big Pony Men’s brand names. The company’s restaurant collection includes The Polo Bar in New York City; RL Restaurant in Chicago; Ralph’s in Paris; The Bar at Ralph Lauren located in Milan; Ralph’s Bar located in Chengdu, China; and Ralph’s Coffee concept. It sells its products to department stores, specialty stores, and golf and pro shops, as well as directly to consumers through its retail stores, concession-based shop-within-shops, and its digital commerce sites. The company directly operates retail stores and concession-based shop-within-shops; and operates Ralph Lauren stores and stores and shops through licensing partners. Ralph Lauren Corporation was founded in 1967 and is headquartered in New York, New York.