Contrasting Birkenstock (NYSE:BIRK) & Fossil Group (NASDAQ:FOSL)

Fossil Group (NASDAQ:FOSL) and Birkenstock (NYSE:BIRK) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, valuation, analyst recommendations, risk, earnings, dividends and institutional ownership.

Risk & Volatility

Fossil Group has a beta of 1.62, meaning that its share price is 62% more volatile than the S&P 500. Comparatively, Birkenstock has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500.

Insider and Institutional Ownership

61.1% of Fossil Group shares are held by institutional investors. Comparatively, 19.9% of Birkenstock shares are held by institutional investors. 2.9% of Fossil Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Fossil Group and Birkenstock, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fossil Group	1	1	2	0	2.25
Birkenstock	1	4	13	0	2.67

Fossil Group currently has a consensus target price of $7.00, suggesting a potential upside of 30.11%. Birkenstock has a consensus target price of $53.28, suggesting a potential upside of 38.29%. Given Birkenstock’s stronger consensus rating and higher probable upside, analysts plainly believe Birkenstock is more favorable than Fossil Group.

Profitability

This table compares Fossil Group and Birkenstock’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fossil Group	-6.19%	-48.51%	-7.06%
Birkenstock	16.26%	12.95%	7.15%

Valuation and Earnings

This table compares Fossil Group and Birkenstock”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fossil Group	$1.00 billion	0.32	-$78.30 million	($1.14)	-4.72
Birkenstock	$2.32 billion	3.06	$385.46 million	$2.21	17.43

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

Summary

Birkenstock beats Fossil Group on 11 of the 14 factors compared between the two stocks.

About Fossil Group

Fossil Group, Inc., together with its subsidiaries, designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. The company’s products include traditional watches, smartwatches, jewelry, handbags, small leather goods, belts, and sunglasses. It also manufactures and distributes private label brands, as well as branded products purchased for resell in other branded retail stores. The company offers its products under its proprietary brands, such as FOSSIL, SKAGEN, MICHELE, RELIC, and ZODIAC; and under the licensed brands, including ARMANI EXCHANGE, DIESEL, DKNY, EMPORIO ARMANI, KATE SPADE NEW YORK, MICHAEL KORS, TORY BURCH, and Skechers. The company sells its products through company-owned retail and outlet stores, department and specialty retail stores, mass market stores, e-commerce sites, licensed and franchised FOSSIL retail stores, and retail concessions, as well as sells its products on airlines. The company was formerly known as Fossil, Inc. and changed its name to Fossil Group, Inc. in May 2013. Fossil Group, Inc. was founded in 1984 and is headquartered in Richardson, Texas.

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.