Analyzing Hennes & Mauritz (OTCMKTS:HNNMY) and Fossil Group (NASDAQ:FOSL)

Hennes & Mauritz (OTCMKTS:HNNMY) and Fossil Group (NASDAQ:FOSL) are both retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, valuation, earnings, dividends and profitability.

Valuation & Earnings

This table compares Hennes & Mauritz and Fossil Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hennes & Mauritz	$23.01 billion	1.03	$1.23 billion	$0.16	21.06
Fossil Group	$1.00 billion	0.25	-$78.30 million	($1.14)	-3.76

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

Insider & Institutional Ownership

0.0% of Hennes & Mauritz shares are held by institutional investors. Comparatively, 61.1% of Fossil Group shares are held by institutional investors. 2.9% of Fossil Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings for Hennes & Mauritz and Fossil Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hennes & Mauritz	3	4	0	1	1.88
Fossil Group	1	1	2	0	2.25

Fossil Group has a consensus price target of $7.00, suggesting a potential upside of 63.17%. Given Fossil Group’s stronger consensus rating and higher probable upside, analysts plainly believe Fossil Group is more favorable than Hennes & Mauritz.

Profitability

This table compares Hennes & Mauritz and Fossil Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hennes & Mauritz	5.55%	30.28%	7.39%
Fossil Group	-6.19%	-48.51%	-7.06%

Volatility and Risk

Hennes & Mauritz has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, Fossil Group has a beta of 1.62, meaning that its share price is 62% more volatile than the S&P 500.

Summary

Hennes & Mauritz beats Fossil Group on 9 of the 15 factors compared between the two stocks.

About Hennes & Mauritz

H & M Hennes & Mauritz AB (publ) provides clothing, accessories, footwear, cosmetics, home textiles, and homeware for women, men, and children worldwide. It offers sportswear, shoes, bags, beauty products, activewear, jeans, and ready-to-wear; and interior products, including bed linens, dinnerware, textiles, furniture, and lighting. The company provides its products under the H&M, H&M HOME, H&M Move, H&M Beauty, COS, Weekday, Monki, & Other Stories, ARKET, Afound, and Singular Society brand names. In addition, it operates Sellpy, a broad digital platform for second-hand fashion and other products; and Creator Studio, a global platform for merchandise design and production, as well as provides solutions to extend the useful life of unwanted garments through reuse and recycling under Looper Textile name. The company offers its products through online and physical stores. H & M Hennes & Mauritz AB (publ) was incorporated in 1943 and is headquartered in Stockholm, Sweden.

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.