Tapestry (NYSE:TPR) vs. adidas (OTCMKTS:ADDDF) Financial Comparison

adidas (OTCMKTS:ADDDF) and Tapestry (NYSE:TPR) are both consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, earnings, institutional ownership, valuation and risk.

Profitability

This table compares adidas and Tapestry’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
adidas	N/A	N/A	N/A
Tapestry	8.44%	229.70%	22.06%

Institutional and Insider Ownership

37.4% of adidas shares are owned by institutional investors. Comparatively, 90.8% of Tapestry shares are owned by institutional investors. 1.3% of Tapestry shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares adidas and Tapestry”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
adidas	N/A	N/A	N/A	$2.97	60.48
Tapestry	$7.85 billion	4.01	$183.20 million	$3.12	49.96

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

Analyst Ratings

This is a summary of recent ratings and price targets for adidas and Tapestry, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
adidas	0	0	0	0	0.00
Tapestry	0	4	15	1	2.85

Tapestry has a consensus target price of $173.88, suggesting a potential upside of 11.55%. Given Tapestry’s stronger consensus rating and higher possible upside, analysts plainly believe Tapestry is more favorable than adidas.

Dividends

adidas pays an annual dividend of $1.12 per share and has a dividend yield of 0.6%. Tapestry pays an annual dividend of $1.60 per share and has a dividend yield of 1.0%. adidas pays out 37.9% of its earnings in the form of a dividend. Tapestry pays out 51.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Tapestry has increased its dividend for 3 consecutive years. Tapestry is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Tapestry beats adidas on 13 of the 15 factors compared between the two stocks.

About adidas

adidas AG, together with its subsidiaries, designs, develops, produces, and markets athletic and sports lifestyle products in Europe, the Middle East, Africa, North America, Greater China, the Asia-Pacific, and Latin America. It offers footwear, apparel, and accessories and gear, such as bags and balls under the adidas brand; golf footwear and apparel under the adidas Golf brand; and outdoor footwear under the Five Ten brand. It sells its products through its own retail stores; mono-branded franchise stores and shop-in-shops; and wholesale and its e-commerce channels. The company was formerly known as adidas-Salomon AG and changed its name to adidas AG in June 2006. adidas AG was founded in 1920 and is headquartered in Herzogenaurach, Germany.

About Tapestry

Tapestry, Inc. provides luxury accessories and branded lifestyle products in the United States, Japan, Greater China, and internationally. The company operates in three segments: Coach, Kate Spade, and Stuart Weitzman. It offers women’s handbags; and women’s accessories, such as small leather goods which includes mini and micro handbags, money pieces, wristlets, pouches, and cosmetic cases, as well as novelty accessories including address books, time management and travel accessories, sketchbooks, and portfolios; and belts, key rings, and charms. The company also provides men products, which includes bag collections, such as business cases, computer bags, messenger-style bags, backpacks, and totes; small leather goods including wallets, card cases, travel organizers, and belts; and footwear, watches, fragrances, sunglasses, novelty accessories, and ready-to-wear items. In addition, it offers other products including women’s footwear and fragrances; eyewear and sunglasses; and jewelry, such as bracelets, necklaces, rings, and earrings, watches, and other women’s seasonal lifestyle apparel collections, including outerwear, ready-to-wear and cold weather accessories, such as gloves, scarves, and hats. Further, the company provides kids items, housewares, and home accessories, such as fashion bedding and tableware, stationery, and gifts. It offers its products through e-commerce sites and concession shop-in-shops, wholesale, and third-party distributors under the Coach, Kate Spade, and Stuart Weitzman brand names. The company was formerly known as Coach, Inc. and changed its name to Tapestry, Inc. in October 2017. Tapestry, Inc. was founded in 1941 and is headquartered in New York, New York.