Reviewing Tapestry (NYSE:TPR) & ON (NYSE:ONON)

Tapestry (NYSE:TPR) and ON (NYSE:ONON) are both large-cap retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, dividends, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Tapestry and ON, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tapestry	0	4	15	2	2.90
ON	1	4	15	2	2.82

Tapestry currently has a consensus price target of $167.65, suggesting a potential upside of 12.13%. ON has a consensus price target of $55.05, suggesting a potential upside of 49.79%. Given ON’s higher possible upside, analysts plainly believe ON is more favorable than Tapestry.

Institutional & Insider Ownership

90.8% of Tapestry shares are held by institutional investors. Comparatively, 36.4% of ON shares are held by institutional investors. 1.3% of Tapestry shares are held by company insiders. Comparatively, 68.6% of ON shares are held by company 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.

Risk and Volatility

Tapestry has a beta of 1.42, suggesting that its stock price is 42% more volatile than the S&P 500. Comparatively, ON has a beta of 2.1, suggesting that its stock price is 110% more volatile than the S&P 500.

Earnings and Valuation

This table compares Tapestry and ON”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tapestry	$7.01 billion	4.31	$183.20 million	$3.12	47.92
ON	$3.64 billion	6.45	$245.87 million	$0.93	39.52

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Tapestry	8.44%	229.70%	22.06%
ON	7.92%	15.72%	8.99%

Summary

Tapestry beats ON on 8 of the 13 factors compared between the two stocks.

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.

About ON

On Holding AG engages in the development and distribution of sports products such as footwear, apparel, and accessories for high-performance running, outdoor, all-day activities, and tennis. It sells its products worldwide through independent retailers and global distributors, its own online presence, and its own stores. The company was founded by David Allemann, Olivier Bernhard, and Caspar Coppetti in January 2010 and is headquartered in Zurich, Switzerland.