Financial Analysis: Ralph Lauren (NYSE:RL) & Wolverine World Wide (NYSE:WWW)

Wolverine World Wide (NYSE:WWW) and Ralph Lauren (NYSE:RL) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, profitability, dividends and risk.

Profitability

This table compares Wolverine World Wide and Ralph Lauren’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wolverine World Wide	5.55%	28.50%	7.23%
Ralph Lauren	11.76%	39.10%	14.11%

Risk and Volatility

Wolverine World Wide has a beta of 1.69, suggesting that its share price is 69% more volatile than the S&P 500. Comparatively, Ralph Lauren has a beta of 1.34, suggesting that its share price is 34% more volatile than the S&P 500.

Insider & Institutional Ownership

90.2% of Wolverine World Wide shares are held by institutional investors. Comparatively, 67.9% of Ralph Lauren shares are held by institutional investors. 1.5% of Wolverine World Wide shares are held by insiders. Comparatively, 37.2% of Ralph Lauren shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Wolverine World Wide pays an annual dividend of $0.40 per share and has a dividend yield of 2.0%. Ralph Lauren pays an annual dividend of $4.00 per share and has a dividend yield of 1.1%. Wolverine World Wide pays out 31.0% of its earnings in the form of a dividend. Ralph Lauren pays out 25.2% 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. Ralph Lauren has increased its dividend for 5 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations for Wolverine World Wide and Ralph Lauren, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wolverine World Wide	0	5	5	1	2.64
Ralph Lauren	0	2	15	0	2.88

Wolverine World Wide currently has a consensus price target of $23.11, suggesting a potential upside of 13.40%. Ralph Lauren has a consensus price target of $449.00, suggesting a potential upside of 18.83%. Given Ralph Lauren’s stronger consensus rating and higher probable upside, analysts clearly believe Ralph Lauren is more favorable than Wolverine World Wide.

Valuation and Earnings

This table compares Wolverine World Wide and Ralph Lauren”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wolverine World Wide	$1.87 billion	0.89	$95.80 million	$1.29	15.80
Ralph Lauren	$8.11 billion	2.77	$941.10 million	$15.87	23.81

Ralph Lauren has higher revenue and earnings than Wolverine World Wide. Wolverine World Wide is trading at a lower price-to-earnings ratio than Ralph Lauren, indicating that it is currently the more affordable of the two stocks.

Summary

Ralph Lauren beats Wolverine World Wide on 14 of the 18 factors compared between the two stocks.

About Wolverine World Wide

Wolverine World Wide, Inc. designs, manufactures, sources, markets, licenses, and distributes footwear, apparel, and accessories in the United States, Europe, the Middle East, Africa, the Asia Pacific, Canada and Latin America. It operates through Active Group and Work Group segments. The company offers casual footwear and apparel; performance outdoor and athletic footwear and apparel; kids' footwear; industrial work boots and apparel; and uniform shoes and boots. The company sources and markets a range of footwear and apparel styles, including shoes, boots and sandals under the Bates, Cat, Chaco, Harley-Davidson, Hush Puppies, Hytest, Merrell, Saucony, Sperry, Keds, Sweaty Betty, and Wolverine brands; and licenses under the Stride Rite brand. It also markets Merrell and Wolverine branded apparel and accessories, as well as licenses its brands for use on non-footwear products, including the Hush Puppies apparel, eyewear, watches, socks, handbags, and plush toys; and Wolverine branded eyewear and gloves. In addition, the company markets pigskin leather under the Wolverine Leather division; sourcing division provides consulting services related to product development, production control, quality assurance, materials procurement, compliance, and other service; and multi-brand direct-to-consumer division includes retail stores that sell footwear and apparel of its brand portfolio. Further, it sells its products to department stores, national chains, catalog and specialty retailers, independent retailers, uniform outlets, and mass merchant and government customers through retail stores, third-party licensees and distributors, and joint ventures; and operates brick and mortar retails stores, and e-commerce sites. Additionally, the company operates through a network of retail stores and e-commerce sites. Wolverine World Wide, Inc. was founded in 1883 and is headquartered in Rockford, Michigan.

About Ralph Lauren

Ralph Lauren Corporation designs, markets, and distributes lifestyle products in North America, Europe, Asia, and internationally. The company offers apparel, including a range of men’s, women’s, and children’s clothing; footwear and accessories, which comprise casual shoes, dress shoes, boots, sneakers, sandals, eyewear, watches, fashion and fine jewelry, scarves, hats, gloves, and umbrellas, as well as leather goods, such as handbags, luggage, small leather goods, and belts; home products consisting of bed and bath lines, furniture, fabric and wallcoverings, floor coverings, lighting, tabletop, kitchen linens, floor coverings, dining, decorative accessories, and giftware; and fragrances. It sells apparel and accessories under the Ralph Lauren Collection, Ralph Lauren Purple Label, Polo Ralph Lauren, Double RL, Lauren Ralph Lauren, Polo Golf Ralph Lauren, Ralph Lauren Golf, RLX Ralph Lauren, Polo Ralph Lauren Children, and Chaps brands; women’s fragrances under the Ralph Lauren Collection, Woman by Ralph Lauren, Romance Collection, and Ralph Collection brand names; and men’s fragrances under the Ralph’s Club, Purple Label, Polo Blue, Polo Red, Polo Green, Polo Black, Polo 67, Safari, Polo Sport, and Big Pony Men’s brand names. The company’s restaurant collection includes The Polo Bar in New York City; RL Restaurant in Chicago; Ralph’s in Paris; The Bar at Ralph Lauren located in Milan; Ralph’s Bar located in Chengdu, China; and Ralph’s Coffee concept. It sells its products to department stores, specialty stores, and golf and pro shops, as well as directly to consumers through its retail stores, concession-based shop-within-shops, and its digital commerce sites. The company directly operates retail stores and concession-based shop-within-shops; and operates Ralph Lauren stores and stores and shops through licensing partners. Ralph Lauren Corporation was founded in 1967 and is headquartered in New York, New York.