Financial Analysis: Luxottica Group (LUXTY) versus National Vision (EYE)

Luxottica Group (OTCMKTS: LUXTY) and National Vision (NASDAQ:EYE) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.

Analyst Recommendations

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This is a summary of current recommendations and price targets for Luxottica Group and National Vision, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Luxottica Group 2 0 1 0 1.67
National Vision 0 3 5 0 2.63

National Vision has a consensus price target of $35.50, suggesting a potential upside of 8.93%. Given National Vision’s stronger consensus rating and higher possible upside, analysts plainly believe National Vision is more favorable than Luxottica Group.

Earnings and Valuation

This table compares Luxottica Group and National Vision’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Luxottica Group $10.35 billion 3.02 $1.17 billion $2.00 32.21
National Vision $1.38 billion 1.77 $45.82 million $0.53 61.49

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

Profitability

This table compares Luxottica Group and National Vision’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Luxottica Group N/A N/A N/A
National Vision N/A N/A N/A

Dividends

Luxottica Group pays an annual dividend of $0.76 per share and has a dividend yield of 1.2%. National Vision does not pay a dividend. Luxottica Group pays out 38.0% of its earnings in the form of a dividend.

Insider & Institutional Ownership

0.5% of Luxottica Group shares are held by institutional investors. Comparatively, 97.4% of National Vision shares are held by institutional investors. 75.0% of Luxottica Group shares are held by 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.

Summary

Luxottica Group beats National Vision on 6 of the 11 factors compared between the two stocks.

About Luxottica Group

Luxottica Group S.p.A., together with its subsidiaries, provides fashion, luxury, sports, and performance eyewear worldwide. It operates through two segments, Manufacturing and Wholesale Distribution, and Retail Distribution. The Manufacturing and Wholesale Distribution segment engages in the design, manufacture, wholesale distribution, and marketing of proprietary and designer lines of prescription frames and sunglasses, as well as performance optics products. This segment offers its products under proprietary brands, such as Ray-Ban, Oakley, Vogue Eyewear, Persol, Oliver Peoples, Alain Mikli, and Arnette; and licensed brands, including Giorgio Armani, Emporio Armani, Armani Exchange, Brooks Brothers, Burberry, Bulgari, Chanel, Coach, Dolce&Gabbana, DKNY, Michael Kors, Paul Smith Spectacles, Prada, Miu Miu, Ralph Lauren, Polo Ralph Lauren, Ralph, Starck Eyes, Tiffany & Co, Tory Burch, Valentino, Versace, and Ferrari. The Retail Distribution segment operates prescription eyewear stores primarily under its retail brands, including LensCrafters, Sunglass Hut, Pearle Vision, OPSM, Laubman & Pank, GMO, David Clulow, Salmoiraghi & Viganò, Ray-Ban, Oakley, Oliver Peoples and Alain Mikli stores, The Optical Shop of Aspen, and ILORI; and licensed brands, such as Sears Optical and Target Optical. As of May 16, 2017, it owned, operated, and franchised a network of approximately 8,000 stores. The company was founded in 1961 and is headquartered in Milan, Italy. Luxottica Group S.p.A. is a subsidiary of Delfin S.à r.l.

About National Vision

National Vision Holdings, Inc., through its subsidiaries, operates as an optical retailer primarily in the United States. The company operates in two segments, Owned & Host and Legacy. It offers eyeglasses and contact lenses under the America's Best, Eyeglass World, Walmart Vision Center, Vista Optical Fred Meyer, and Vista Optical Military brand stores, as well as provides optometric services. As of December 30, 2017, the company operated 1,013 retail stores across 5 brands, as well as 18 consumer Websites. National Vision Holdings, Inc. was founded in 1990 and is based in Duluth, Georgia.

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