Michael Kors Holdings Limited (NYSE: KORS) and Urban Outfitters (NASDAQ:URBN) are both mid-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, risk, earnings, valuation and institutional ownership.

Volatility and Risk

Michael Kors Holdings Limited has a beta of 0.02, meaning that its stock price is 98% less volatile than the S&P 500. Comparatively, Urban Outfitters has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500.

Earnings & Valuation

This table compares Michael Kors Holdings Limited and Urban Outfitters’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Michael Kors Holdings Limited $4.46 billion 1.66 $1.07 billion $3.22 15.16
Urban Outfitters $3.53 billion 0.76 $407.95 million $1.49 16.46

Michael Kors Holdings Limited has higher revenue and earnings than Urban Outfitters. Michael Kors Holdings Limited is trading at a lower price-to-earnings ratio than Urban Outfitters, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

84.1% of Michael Kors Holdings Limited shares are owned by institutional investors. Comparatively, 87.7% of Urban Outfitters shares are owned by institutional investors. 6.0% of Michael Kors Holdings Limited shares are owned by company insiders. Comparatively, 26.3% of Urban Outfitters shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Michael Kors Holdings Limited and Urban Outfitters’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Michael Kors Holdings Limited 11.91% 40.26% 26.12%
Urban Outfitters 4.92% 13.61% 9.27%

Analyst Ratings

This is a summary of recent ratings for Michael Kors Holdings Limited and Urban Outfitters, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Michael Kors Holdings Limited 3 17 7 0 2.15
Urban Outfitters 3 16 6 0 2.12

Michael Kors Holdings Limited currently has a consensus price target of $44.92, suggesting a potential downside of 7.97%. Urban Outfitters has a consensus price target of $22.00, suggesting a potential downside of 10.28%. Given Michael Kors Holdings Limited’s stronger consensus rating and higher possible upside, equities analysts clearly believe Michael Kors Holdings Limited is more favorable than Urban Outfitters.

Summary

Michael Kors Holdings Limited beats Urban Outfitters on 10 of the 14 factors compared between the two stocks.

About Michael Kors Holdings Limited

Michael Kors Holdings Limited is a designer, marketer, distributor and retailer of branded women’s apparel and accessories and men’s apparel bearing the Michael Kors tradename and related trademarks MICHAEL KORS, MICHAEL MICHAEL KORS, and various other related trademarks and logos. The Company operates through three segments: retail, wholesale and licensing. The Retail operations consist of collection stores and lifestyle stores, including concessions and outlet stores, located primarily in the Americas (the United States, Canada and Latin America), Europe and Asia, as well as e-commerce. Wholesale revenues are principally derived from major department and specialty stores located throughout the Americas, Europe and Asia. The Company licenses its trademarks on products, such as fragrances, beauty, eyewear, leather goods, jewelry, watches, coats, men’s suits, swimwear, furs and ties, as well as through geographic licenses.

About Urban Outfitters

Urban Outfitters, Inc. is a lifestyle specialty retail company. The Company operates through two segments: Retail and Wholesale. The Company’s Retail segment consists of its Urban Outfitters, Anthropologie, Free People, Terrain and Bhldn brands, whose merchandise is sold to its customers through retail stores, Websites, mobile applications, catalogs and customer contact centers. The Retail segment also includes Vetri Family, which operates restaurants under the names Amis, Alla Spina, Lo Spiedo, Pizzeria Vetri and Osteria. Its Wholesale segment consists of the Free People wholesale division that primarily designs, develops and markets young women’s contemporary casual apparel and shoes through individual and chain specialty stores and department stores. The Company’s Wholesale segment includes Free People-branded tops, bottoms, sweaters, dresses, intimates, shoes and activewear, which are sold through department and specialty stores around the world, and its Free People stores.

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