Gap, Inc. (The) (GPS) versus Michael Kors Holdings Limited (KORS) Head-To-Head Contrast
Gap, Inc. (The) (NYSE: GPS) and Michael Kors Holdings Limited (NYSE:KORS) are both mid-cap retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, profitability, valuation and risk.
Institutional and Insider Ownership
56.2% of Gap, Inc. (The) shares are held by institutional investors. Comparatively, 83.4% of Michael Kors Holdings Limited shares are held by institutional investors. 27.3% of Gap, Inc. (The) shares are held by insiders. Comparatively, 6.0% of Michael Kors Holdings Limited shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This table compares Gap, Inc. (The) and Michael Kors Holdings Limited’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Gap, Inc. (The)||5.42%||28.50%||10.64%|
|Michael Kors Holdings Limited||11.91%||40.26%||26.12%|
Earnings and Valuation
This table compares Gap, Inc. (The) and Michael Kors Holdings Limited’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Gap, Inc. (The)||$15.47 billion||0.72||$2.01 billion||$2.10||13.50|
|Michael Kors Holdings Limited||$4.46 billion||1.57||$1.07 billion||$3.22||14.34|
Gap, Inc. (The) has higher revenue and earnings than Michael Kors Holdings Limited. Gap, Inc. (The) is trading at a lower price-to-earnings ratio than Michael Kors Holdings Limited, indicating that it is currently the more affordable of the two stocks.
Gap, Inc. (The) pays an annual dividend of $0.92 per share and has a dividend yield of 3.2%. Michael Kors Holdings Limited does not pay a dividend. Gap, Inc. (The) pays out 43.8% of its earnings in the form of a dividend. Gap, Inc. (The) has increased its dividend for 7 consecutive years.
This is a breakdown of current ratings and target prices for Gap, Inc. (The) and Michael Kors Holdings Limited, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Gap, Inc. (The)||2||19||6||0||2.15|
|Michael Kors Holdings Limited||3||19||5||0||2.07|
Gap, Inc. (The) currently has a consensus target price of $26.58, indicating a potential downside of 6.28%. Michael Kors Holdings Limited has a consensus target price of $43.42, indicating a potential downside of 5.94%. Given Michael Kors Holdings Limited’s higher probable upside, analysts plainly believe Michael Kors Holdings Limited is more favorable than Gap, Inc. (The).
About Gap, Inc. (The)
The Gap, Inc. (Gap Inc.) is an apparel retail company. The Company offers apparel, accessories and personal care products for men, women and children under the Gap, Banana Republic, Old Navy, Athleta and Intermix brands. Its products are available to customers online through Company-owned Websites and through the use of third-parties that provide logistics and fulfillment services. In addition to operating in the specialty, outlet, online and franchise channels, it also uses the Company’s omni-channel capabilities to bridge the digital world and physical stores. Its omni-channel services, including order-in-store, reserve-in-store, find-in-store and ship-from-store are tailored across its portfolio of brands. It also sells products that are designed and manufactured by branded third-parties, especially at its Intermix brands. It has Company-operated stores in the United States, Canada, the United Kingdom, France, Ireland, Japan, Italy, China, Hong Kong, Taiwan, and Mexico.
About Michael Kors Holdings Limited
Michael Kors Holdings Limited is a designer, marketer, distributor and retailer of branded women’s apparel and accessories and men’s apparel bearing the Michael Kors tradename and related trademarks MICHAEL KORS, MICHAEL MICHAEL KORS, and various other related trademarks and logos. The Company operates through three segments: retail, wholesale and licensing. The Retail operations consist of collection stores and lifestyle stores, including concessions and outlet stores, located primarily in the Americas (the United States, Canada and Latin America), Europe and Asia, as well as e-commerce. Wholesale revenues are principally derived from major department and specialty stores located throughout the Americas, Europe and Asia. The Company licenses its trademarks on products, such as fragrances, beauty, eyewear, leather goods, jewelry, watches, coats, men’s suits, swimwear, furs and ties, as well as through geographic licenses.
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