Analyzing Movado Group (MOV) & Fossil Group (FOSL)

Movado Group (NYSE: MOV) and Fossil Group (NASDAQ:FOSL) are both small-cap cyclical consumer goods & services companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, dividends, risk and profitabiliy.

Risk and Volatility

Movado Group has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500. Comparatively, Fossil Group has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500.

Earnings & Valuation

This table compares Movado Group and Fossil Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Movado Group $537.95 million 0.73 $59.24 million $1.18 20.25
Fossil Group $2.96 billion 0.17 $210.54 million $0.51 20.02

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

Profitability

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

Net Margins Return on Equity Return on Assets
Movado Group -4.19% -3.55% -2.77%
Fossil Group 0.84% 7.59% 3.41%

Analyst Recommendations

This is a breakdown of current recommendations for Movado Group and Fossil Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Movado Group 0 1 1 0 2.50
Fossil Group 3 10 2 0 1.93

Movado Group currently has a consensus price target of $29.50, suggesting a potential upside of 23.43%. Fossil Group has a consensus price target of $19.33, suggesting a potential upside of 89.36%. Given Fossil Group’s higher probable upside, analysts clearly believe Fossil Group is more favorable than Movado Group.

Dividends

Movado Group pays an annual dividend of $0.52 per share and has a dividend yield of 2.2%. Fossil Group does not pay a dividend. Movado Group pays out 44.1% of its earnings in the form of a dividend. Movado Group has increased its dividend for 5 consecutive years.

Insider and Institutional Ownership

64.7% of Movado Group shares are owned by institutional investors. 33.3% of Movado Group shares are owned by insiders. Comparatively, 12.8% of Fossil Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Fossil Group beats Movado Group on 10 of the 17 factors compared between the two stocks.

About Movado Group

Movado Group, Inc. designs, sources, markets and distributes watches. The Company operates through two segments: Wholesale and Retail. The Wholesale segment includes the design, development, sourcing, marketing and distribution of watches, and after-sales service activities and shipping. It sells all of its brands to jewelry store chains and department stores, as well as independent jewelers. The Retail segment includes its outlet stores. As of January 31, 2017, its subsidiary, Movado Retail Group, Inc., operated 40 outlet stores located in outlet centers across the United States. It divides its business into two geographic locations: the United States operations and International operations. It has international operations in Europe, the Americas, the Middle East and Asia. Its portfolio of brands includes Coach Watches, Concord, Ebel, ESQ Movado, Scuderia Ferrari Watches, HUGO BOSS Watches, Juicy Couture Watches, Lacoste Watches, Movado and Tommy Hilfiger Watches.

About Fossil Group

Fossil Group, Inc. is a design, marketing and distribution company that specializes in consumer fashion accessories. The Company’s segments include Americas, Europe and Asia. Each segment includes sales to wholesale and distributor customers, and sales through the Company-owned retail stores and e-commerce activities based on the location of the selling entity. The Americas segment includes sales to customers based in Canada, Latin America and the United States. The Europe segment includes sales to customers based in European countries, the Middle East and Africa. The Asia segment includes sales to customers based in Australia, China, India, Indonesia, Japan, Malaysia, New Zealand, Singapore, South Korea, Taiwan and Thailand. The Company’s principal offerings include a line of men’s and women’s fashion watches and jewelry, handbags, small leather goods, belts, sunglasses and soft accessories.

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