Analyzing Ralph Lauren (RL) & Perry Ellis International (PERY)

Ralph Lauren (NYSE: RL) and Perry Ellis International (NASDAQ:PERY) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, earnings, valuation, institutional ownership and risk.

Risk and Volatility

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Ralph Lauren has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500. Comparatively, Perry Ellis International has a beta of 0.43, suggesting that its share price is 57% less volatile than the S&P 500.

Dividends

Ralph Lauren pays an annual dividend of $2.00 per share and has a dividend yield of 1.9%. Perry Ellis International does not pay a dividend. Ralph Lauren pays out 35.0% of its earnings in the form of a dividend.

Institutional and Insider Ownership

73.6% of Ralph Lauren shares are owned by institutional investors. Comparatively, 74.4% of Perry Ellis International shares are owned by institutional investors. 32.9% of Ralph Lauren shares are owned by company insiders. Comparatively, 20.2% of Perry Ellis International shares are owned by company 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.

Profitability

This table compares Ralph Lauren and Perry Ellis International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ralph Lauren -1.33% 14.64% 8.39%
Perry Ellis International 6.48% 9.55% 5.47%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Ralph Lauren and Perry Ellis International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ralph Lauren 4 8 5 0 2.06
Perry Ellis International 0 2 4 0 2.67

Ralph Lauren currently has a consensus price target of $97.72, indicating a potential downside of 9.53%. Perry Ellis International has a consensus price target of $30.00, indicating a potential upside of 17.05%. Given Perry Ellis International’s stronger consensus rating and higher possible upside, analysts plainly believe Perry Ellis International is more favorable than Ralph Lauren.

Earnings and Valuation

This table compares Ralph Lauren and Perry Ellis International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ralph Lauren $6.65 billion 1.32 -$99.30 million $5.71 18.92
Perry Ellis International $874.85 million 0.46 $56.65 million $2.13 12.03

Perry Ellis International has lower revenue, but higher earnings than Ralph Lauren. Perry Ellis International 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 Perry Ellis International on 10 of the 16 factors compared between the two stocks.

About Ralph Lauren

Ralph Lauren Corporation designs, markets, and distributes lifestyle products worldwide. The company operates in three segments: North America, Europe, and Asia. It offers apparel, including a range of men's, women's, and children's clothing; accessories, which comprise footwear, eyewear, watches, fine jewelry, hats, belts, and leather goods, such as handbags and luggage; home products consisting of bedding and bath products, furniture, fabrics and wallpapers, lightings, paints, tabletops, and giftware; and fragrances. The company sells apparel and accessories under the Ralph Lauren Collection, Ralph Lauren Purple Label, Polo Ralph Lauren, Double RL, Lauren Ralph Lauren, Polo and RLX Golf, Polo Ralph Lauren Children, Chaps, Club Monaco, and other brand names; women's fragrances under the Ralph Lauren Blue, Romance collection, RALPH collection, and Big Pony collection brand names; and men's fragrances under the Safari, Polo Sport, Polo Green, Polo Blue, Polo Blue Sport, Purple Label, Polo Black, Double Black, Big Pony collection, Polo Red collection, and Polo Supreme Oud brands. Its restaurant concepts include The Polo Bar in New York City; RL Restaurant in Chicago; Ralph's in Paris; and Ralph's Coffee concept in London. Ralph Lauren Corporation sells its products to department stores, specialty stores, and golf and pro shops, as well as through its retail stores, concession-based shop-within-shops, and its e-commerce sites. It directly operates 466 retail stores and 619 concession-based shop-within-shops; and operates 105 Ralph Lauren stores, 22 Ralph Lauren concession shops, and 136 Club Monaco stores and shops through licensing partners. Ralph Lauren Corporation was founded in 1967 and is based in New York, New York.

About Perry Ellis International

Perry Ellis International, Inc. designs, sources, markets, and licenses apparel products and accessories. The company operates through Men's Sportswear and Swim, Women's Sportswear, Direct-to-Consumer, and Licensing segments. It offers men's wear, such as career and casual sportswear, golf apparel, sports apparel, swimwear, activewear, and accessories; and women's wear, including dresses, sportswear, swimwear, activewear, and accessories. The company provides its products under various brands comprising Ben Hogan, Cubavera, Farah, Grand Slam, Jantzen, Laundry by Shelli Segal, Original Penguin by Munsingwear, Perry Ellis, Rafaella, and Savane. It also licenses the Callaway Golf, PGA TOUR, and Jack Nicklaus brands for golf apparel; the Jag brand for swimwear and cover-ups; and the Nike brand for swimwear and accessories, as well as Pro Player, John Henry, and Gotcha brands. The company distributes its products to wholesale customers that represent various levels of retail distribution, including luxury stores, department stores, national and regional chain stores, mass merchants, specialty stores, sporting goods stores, the corporate wear market, and e-commerce, as well as clubs and independent retailers. As of April 1, 2017, it operated 38 Perry Ellis, 14 Original Penguin, and 2 multi-brand retail outlet stores located primarily in upscale retail outlet malls in the United States, the United Kingdom, and Puerto Rico; and 2 Perry Ellis, 2 Cubavera, 12 Original Penguin, and 1 multi-brand full price retail stores located in upscale demographic markets in the United States and the United Kingdom. The company was formerly known as Supreme International Corporation and changed its name to Perry Ellis International, Inc. in 1999. Perry Ellis International, Inc. was founded in 1967 and is headquartered in Miami, Florida.

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