Financial Review: Birkenstock (NYSE:BIRK) versus Ralph Lauren (NYSE:RL)

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

Risk & Volatility

Ralph Lauren has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500. Comparatively, Birkenstock has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ralph Lauren	11.76%	39.10%	14.11%
Birkenstock	14.82%	13.36%	7.21%

Institutional & Insider Ownership

67.9% of Ralph Lauren shares are owned by institutional investors. Comparatively, 19.9% of Birkenstock shares are owned by institutional investors. 37.2% of Ralph Lauren shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Ralph Lauren and Birkenstock, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ralph Lauren	0	2	16	0	2.89
Birkenstock	0	6	13	0	2.68

Ralph Lauren presently has a consensus price target of $445.67, indicating a potential upside of 31.57%. Birkenstock has a consensus price target of $52.50, indicating a potential upside of 68.60%. Given Birkenstock’s higher possible upside, analysts clearly believe Birkenstock is more favorable than Ralph Lauren.

Earnings and Valuation

This table compares Ralph Lauren and Birkenstock”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ralph Lauren	$8.11 billion	2.49	$941.10 million	$15.87	21.34
Birkenstock	$2.32 billion	2.39	$385.46 million	$2.13	14.62

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

Summary

Ralph Lauren beats Birkenstock on 12 of the 14 factors compared between the two stocks.

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.

About Birkenstock

Birkenstock Holding plc manufactures and sells footwear products. It also offers sandals, shoes, closed-toe silhouettes, skincare products, and accessories. The company sells its products through e-commerce sites and a network of owned retail stores, as well as business-to-business channels. It operates in the United States, Brazil, Canada, Mexico, Europe, APMA, and internationally. Birkenstock Holding plc was founded in 1774 and is based in London, the United Kingdom. Birkenstock Holding plc is a subsidiary of BK LC Lux MidCo S.à r.l.