Analyzing Kering (OTCMKTS:PPRUY) & GAP (NYSE:GAP)

GAP (NYSE:GAP) and Kering (OTCMKTS:PPRUY) are both retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, valuation, analyst recommendations, institutional ownership, profitability and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for GAP and Kering, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAP	0	6	10	2	2.78
Kering	1	6	2	0	2.11

GAP presently has a consensus target price of $28.71, indicating a potential upside of 33.41%. Given GAP’s stronger consensus rating and higher probable upside, equities analysts clearly believe GAP is more favorable than Kering.

Volatility & Risk

GAP has a beta of 2.03, indicating that its share price is 103% more volatile than the S&P 500. Comparatively, Kering has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500.

Dividends

GAP pays an annual dividend of $0.70 per share and has a dividend yield of 3.3%. Kering pays an annual dividend of $0.22 per share and has a dividend yield of 0.8%. GAP pays out 27.6% of its earnings in the form of a dividend. GAP has increased its dividend for 1 consecutive years. GAP is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

58.8% of GAP shares are held by institutional investors. Comparatively, 1.0% of Kering shares are held by institutional investors. 31.0% of GAP shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares GAP and Kering”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GAP	$15.40 billion	0.50	$816.00 million	$2.54	8.47
Kering	$16.60 billion	2.16	$81.46 million	N/A	N/A

GAP has higher earnings, but lower revenue than Kering.

Profitability

This table compares GAP and Kering’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GAP	6.25%	21.13%	6.23%
Kering	N/A	N/A	N/A

Summary

GAP beats Kering on 13 of the 16 factors compared between the two stocks.

About GAP

Gap, Inc. operates as a global apparel retail company, which offers clothing, apparel, accessories, and personal care products for men, women, and children. The firm operates through the following segments: Gap Global, Old Navy Global, Banana Republic Global, Athleta, and Other. The Gap Global segment includes apparel and accessories for men and women under the Gap brand, along with the GapKids, BabyGap, GapMaternity, GapBody, and GapFit collections. The Old Navy Global segment offers clothing and accessories for adults and children. The Banana Republic Global segment provides clothing, eyewear, jewelry, shoes, handbags, and fragrances. The Athleta segment offers fitness apparel for women. The company founded by Donald G. Fisher and Doris F. Fisher in July 1969 and is headquartered in San Francisco, CA.

About Kering

Kering SA manages the development of a series of renowned houses in fashion, leather goods and jewelry in France, the Asia-Pacific, Western Europe, North America, Japan, and internationally. The company offers ready-to-wear products apparel and accessories for men and women. It also offers leather goods and shoes; watches and jewelry; eyewear products; and fragrances and cosmetics. The company provides Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, Brioni, Boucheron, Pomellato, DoDo, Qeelin, Ginori 1735, Kering Beauté, and Kering Eyewear brands. The company was formerly known as PPR SA and changed its name to Kering SA in June 2013. Kering SA was founded in 1963 and is based in Paris, France.