Reviewing Fossil Group (NASDAQ:FOSL) and Vera Bradley (NASDAQ:VRA)

Fossil Group (NASDAQ:FOSL) and Vera Bradley (NASDAQ:VRA) are both small-cap retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Institutional and Insider Ownership

61.1% of Fossil Group shares are owned by institutional investors. Comparatively, 59.9% of Vera Bradley shares are owned by institutional investors. 2.9% of Fossil Group shares are owned by insiders. Comparatively, 14.3% of Vera Bradley shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Fossil Group and Vera Bradley”s 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	0.26	-$78.30 million	($1.14)	-3.81
Vera Bradley	$269.65 million	0.42	-$47.84 million	($0.69)	-5.72

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Fossil Group and Vera Bradley, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fossil Group	1	1	2	0	2.25
Vera Bradley	1	2	0	0	1.67

Fossil Group currently has a consensus target price of $7.00, suggesting a potential upside of 61.10%. Given Fossil Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe Fossil Group is more favorable than Vera Bradley.

Profitability

This table compares Fossil Group and Vera Bradley’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%
Vera Bradley	-7.02%	-6.66%	-3.65%

Volatility & Risk

Fossil Group has a beta of 1.62, meaning that its stock price is 62% more volatile than the S&P 500. Comparatively, Vera Bradley has a beta of 1.62, meaning that its stock price is 62% more volatile than the S&P 500.

Summary

Fossil Group beats Vera Bradley on 7 of the 13 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 Vera Bradley

Vera Bradley, Inc., together with its subsidiaries, designs, manufactures, and sells women’s handbags, luggage and travel items, fashion and home accessories, and gifts. It operates through three segments: Vera Bradley Direct, Vera Bradley Indirect, and Pura Vida. The company offers bag products, such as totes, crossbodies, satchels, clutches, backpacks, baby bags, and lunch bags; accessories, including ID holders, lanyards, wallets, wristlets, eyewear, scarves, hair accessories, and various technology accessories; bracelets, rings, and necklaces under Pura Vida brand name; and travel products consist of rolling luggage, cosmetics, and travel and packing accessories, as well as travel bags comprising duffel and weekend bags. It also provides home products that include throw blankets, beach towels, and comforters, as well as items, such as mugs and tumblers; apparel/footwear comprising sleepwear, footwear, outerwear, tees and hoodies, and socks; and stationery and merchandising products, as well as freight, licensing, and gift card breakage services. The company sells its Vera Bradley branded products through its full-line and outlet stores in the United States; verabradley.com, an online outlet site; its annual outlet sale in Fort Wayne, Indiana. It sells its Pura Vida branded products through wholesale retailers and Pura Vida websites, including www.puravidabracelets.com, www.puravidabracelets.eu, and www.puravidabracelets.ca; and Vera Bradley Indirect branded products to specialty retail locations, department stores, national accounts, third party e-commerce sites, third-party inventory liquidators, and through licensing agreements. Vera Bradley, Inc. was incorporated in 1982 and is headquartered in Roanoke, Indiana.