Financial Survey: Groupon (GRPN) versus Tiffany & Co. (TIF)

Groupon (NASDAQ: GRPN) and Tiffany & Co. (NYSE:TIF) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, risk, dividends, analyst recommendations, institutional ownership and earnings.

Dividends

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Tiffany & Co. pays an annual dividend of $2.00 per share and has a dividend yield of 2.1%. Groupon does not pay a dividend. Tiffany & Co. pays out 67.6% of its earnings in the form of a dividend. Tiffany & Co. has raised its dividend for 8 consecutive years.

Valuation and Earnings

This table compares Groupon and Tiffany & Co.’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Groupon $2.84 billion 0.85 $14.04 million $0.02 215.11
Tiffany & Co. $4.17 billion 2.86 $370.10 million $2.96 32.41

Tiffany & Co. has higher revenue and earnings than Groupon. Tiffany & Co. is trading at a lower price-to-earnings ratio than Groupon, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

63.6% of Groupon shares are held by institutional investors. Comparatively, 83.2% of Tiffany & Co. shares are held by institutional investors. 23.4% of Groupon shares are held by insiders. Comparatively, 1.4% of Tiffany & Co. shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Groupon and Tiffany & Co., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Groupon 2 9 6 0 2.24
Tiffany & Co. 0 9 8 0 2.47

Groupon presently has a consensus target price of $5.00, suggesting a potential upside of 16.22%. Tiffany & Co. has a consensus target price of $106.87, suggesting a potential upside of 11.39%. Given Groupon’s higher probable upside, equities research analysts plainly believe Groupon is more favorable than Tiffany & Co..

Profitability

This table compares Groupon and Tiffany & Co.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Groupon 0.49% 0.22% 0.03%
Tiffany & Co. 8.87% 16.32% 9.76%

Risk and Volatility

Groupon has a beta of 1.61, indicating that its share price is 61% more volatile than the S&P 500. Comparatively, Tiffany & Co. has a beta of 1.78, indicating that its share price is 78% more volatile than the S&P 500.

Summary

Tiffany & Co. beats Groupon on 13 of the 16 factors compared between the two stocks.

Groupon Company Profile

Groupon, Inc. operates online local commerce marketplaces around the world that connect merchants to consumers by offering goods and services at a discount. The Company operates through three segments: North America, which represents the United States and Canada; EMEA, which consists of Europe, and the Middle East and Africa, and the remainder of its international operations (Rest of World). It offers goods and services in three primary categories: Local Deals (Local), Groupon Goods (Goods) and Groupon Getaways (Travel). Its Local category includes offerings from local and national merchants, as well as local events. Its Goods category offers customers the ability to find deals on merchandise across various product lines, including electronics, sporting goods, jewelry, toys, household items and apparel. Through its Travel category, it features travel offers at both discounted and market rates, including hotels, airfare and package deals covering both domestic and international travel.

Tiffany & Co. Company Profile

Tiffany & Co. is a holding company that operates through its subsidiary companies. The Company’s principal subsidiary, Tiffany and Company (Tiffany), is a jeweler and specialty retailer. The Company’s segments include Americas, Asia-Pacific, Japan, Europe and Other. Through its subsidiaries, the Company designs and manufactures products and operates TIFFANY & CO. retail stores around the world, and also sells its products through Internet, catalog, business-to-business and wholesale operations. The Company also sells timepieces, leather goods, sterling silverware, china, crystal, stationery, fragrances and accessories. The Americas segment includes sale in Company-operated TIFFANY & CO. stores in the United States, Canada and Latin America. As of January 31, 2017, the Asia-Pacific segment included 85 Company-operated TIFFANY & CO. stores. As of January 31, 2017, the Japan segment included 55 Company-operated TIFFANY & CO. stores. The Other segment consists of non-reportable segments.

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