Buckle (BKE) versus Kate Spade & Co (KATE) Critical Comparison

Buckle (NYSE: BKE) and Kate Spade & Co (NYSE:KATE) are both cyclical consumer goods & services companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, profitability, analyst recommendations, dividends and risk.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Buckle and Kate Spade & Co, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Buckle 1 0 0 0 1.00
Kate Spade & Co 1 13 1 0 2.00

Buckle presently has a consensus target price of $13.00, suggesting a potential downside of 40.23%. Kate Spade & Co has a consensus target price of $20.04, suggesting a potential upside of 8.39%. Given Kate Spade & Co’s stronger consensus rating and higher probable upside, analysts clearly believe Kate Spade & Co is more favorable than Buckle.

Risk and Volatility

Buckle has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500. Comparatively, Kate Spade & Co has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500.

Profitability

This table compares Buckle and Kate Spade & Co’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Buckle 9.17% 19.13% 14.39%
Kate Spade & Co 0.44% 1.11% 0.43%

Dividends

Buckle pays an annual dividend of $1.00 per share and has a dividend yield of 4.6%. Kate Spade & Co does not pay a dividend. Buckle pays out 57.8% of its earnings in the form of a dividend. Buckle has raised its dividend for 3 consecutive years.

Earnings and Valuation

This table compares Buckle and Kate Spade & Co’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Buckle $974.87 million 1.09 $97.96 million $1.73 12.57
Kate Spade & Co N/A N/A N/A $1.10 16.81

Buckle has higher revenue and earnings than Kate Spade & Co. Buckle is trading at a lower price-to-earnings ratio than Kate Spade & Co, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

59.8% of Buckle shares are owned by institutional investors. Comparatively, 97.9% of Kate Spade & Co shares are owned by institutional investors. 41.7% of Buckle shares are owned by company insiders. Comparatively, 0.8% of Kate Spade & Co shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Buckle beats Kate Spade & Co on 8 of the 14 factors compared between the two stocks.

About Buckle

The Buckle, Inc. is a retailer of casual apparel, footwear and accessories for young men and women. As of January 28, 2017, the Company operated 467 retail stores in 44 states throughout the United States under the names Buckle and The Buckle. The Company markets a selection of brand name casual apparel, including denims, other casual bottoms, tops, sportswear, outerwear, accessories and footwear. The Company provides customer services, such as free hemming, free gift-wrapping, easy layaways, the Buckle private label credit card, and a guest loyalty program. The Company offers denims from brands, such as Miss Me, Rock Revival, Big Star Vintage, Buffalo Jeans, KanCan, Flying Monkey and Levi’s. Its other brands include Hurley, Billabong, Affliction, American Fighter, Fast & Furious, Oakley, Fox, Puma, Obey, RVCA, Salvage, 7 Diamonds, Nixon, Amuse Society, Free People, White Crow, Corral, Reef, Kustom, Timberland, UGG, TOMS, SAXX, Stance, Lokai, Ray-Ban, and Fossil.

About Kate Spade & Co

Kate Spade & Company is engaged in the design and marketing of a range of accessories and apparel. It operates through three segments. The KATE SPADE North America segment consists of the Company’s kate spade new york and JACK SPADE brands in North America. The KATE SPADE International segment consists of the Company’s kate spade new york and JACK SPADE brands in international markets, which operates principally in Japan, Asia (excluding Japan), Europe and Latin America). The Adelington Design Group segment primarily consists of exclusive arrangements to supply jewelry for the LIZ CLAIBORNE and MONET brands. In addition, the Adelington Design Group segment serves J.C. Penney Corporation, Inc. (JCPenney) through exclusive supplier agreements for the LIZ CLAIBORNE and MONET jewelry lines. As of December 31, 2016, it operated 98 the United States Specialty Retail Stores; 35 Foreign Specialty Retail Stores; 65 the United States Outlet Stores; 17 Foreign Outlet Stores, and 54 Concessions.

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