Michael Kors (NYSE: KORS) and Genesco (NYSE:GCO) are both cyclical consumer goods & services companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Profitability

This table compares Michael Kors and Genesco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Michael Kors 11.32% 40.86% 24.94%
Genesco -4.24% 6.93% 4.03%

Earnings & Valuation

This table compares Michael Kors and Genesco’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Michael Kors $4.49 billion 2.02 $552.50 million $3.37 17.74
Genesco $2.87 billion 0.24 $97.43 million ($6.33) -5.49

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

Volatility and Risk

Michael Kors has a beta of 0.08, suggesting that its stock price is 92% less volatile than the S&P 500. Comparatively, Genesco has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500.

Institutional and Insider Ownership

86.6% of Michael Kors shares are owned by institutional investors. Comparatively, 98.0% of Genesco shares are owned by institutional investors. 6.0% of Michael Kors shares are owned by insiders. Comparatively, 3.3% of Genesco shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Michael Kors and Genesco, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Michael Kors 1 17 11 0 2.34
Genesco 0 4 5 0 2.56

Michael Kors currently has a consensus price target of $62.30, suggesting a potential upside of 4.17%. Genesco has a consensus price target of $37.33, suggesting a potential upside of 7.43%. Given Genesco’s stronger consensus rating and higher possible upside, analysts clearly believe Genesco is more favorable than Michael Kors.

Summary

Michael Kors beats Genesco on 10 of the 14 factors compared between the two stocks.

About Michael Kors

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.

About Genesco

Genesco Inc. is a retailer and wholesaler of footwear, apparel and accessories. The Company operates in five segments: Journeys Group, Schuh Group, Lids Sports Group, Johnston & Murphy Group and Licensed Brands. It relies on independent third-party manufacturers for production of its footwear products sold at wholesale. It sources footwear and accessory products from foreign manufacturers located in Bangladesh, Brazil, Cambodia, Canada, China, Dominican Republic, El Salvador, France, Germany, Hong Kong, India, Indonesia, Italy, Mexico, the Netherlands, Portugal, Peru, Romania, Taiwan and Vietnam. As of January 28, 2017, it operated 2,794 retail footwear, headwear and sports apparel and accessory stores and leased departments located primarily throughout the United States and in Puerto Rico, including 147 headwear and sports apparel and accessory stores and 87 footwear stores in Canada and 128 footwear stores in the United Kingdom, the Republic of Ireland and Germany.

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