Critical Comparison: Movado Group (NYSE:MOV) vs. Hermès International Société en commandite par actions (OTCMKTS:HESAF)

Hermès International Société en commandite par actions (OTCMKTS:HESAF) and Movado Group (NYSE:MOV) are both consumer cyclical companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, valuation, analyst recommendations, risk, earnings, dividends and institutional ownership.

Dividends

Hermès International Société en commandite par actions pays an annual dividend of $2.70 per share and has a dividend yield of 0.1%. Movado Group pays an annual dividend of $1.40 per share and has a dividend yield of 6.2%. Hermès International Société en commandite par actions pays out 34.5% of its earnings in the form of a dividend. Movado Group pays out 78.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation & Earnings

This table compares Hermès International Société en commandite par actions and Movado Group’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hermès International Société en commandite par actions	N/A	N/A	N/A	$7.84	292.31
Movado Group	$672.60 million	0.75	$46.71 million	$1.79	12.61

Movado Group has higher revenue and earnings than Hermès International Société en commandite par actions. Movado Group is trading at a lower price-to-earnings ratio than Hermès International Société en commandite par actions, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

3.5% of Hermès International Société en commandite par actions shares are held by institutional investors. Comparatively, 72.1% of Movado Group shares are held by institutional investors. 30.1% of Movado Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Hermès International Société en commandite par actions and Movado Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hermès International Société en commandite par actions	N/A	N/A	N/A
Movado Group	6.09%	8.18%	5.47%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Hermès International Société en commandite par actions and Movado Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hermès International Société en commandite par actions	0	0	0	0	N/A
Movado Group	0	0	1	0	3.00

Movado Group has a consensus target price of $41.00, suggesting a potential upside of 81.58%. Given Movado Group’s higher probable upside, analysts plainly believe Movado Group is more favorable than Hermès International Société en commandite par actions.

Summary

Movado Group beats Hermès International Société en commandite par actions on 9 of the 12 factors compared between the two stocks.

About Hermès International Société en commandite par actions

Hermès International Société en commandite par actions engages in the production, wholesale, and retail of various goods. The company offers leather goods and saddlery, such as bags for men and women, travel articles, small leather goods and accessories, saddles, bridles, and a full range of equestrian products and clothing; ready-to-wear garments for men and women; and accessories, including jewelry, belts, hats, gloves, the Internet of Things products, and shoes. It also provides silk and textiles for men and women; art of living and tableware products; perfumes; and watches. In addition, the company is also involved in weaving, engraving, printing, dyeing, finishing, and producing textiles; and purchasing, tanning, dyeing, finishing, and selling precious leathers. It sells its products through a network of stores worldwide. The company also sells watches, perfumes, and tableware through a network of specialized stores. Hermès International Société en commandite par actions was founded in 1837 and is based in Paris, France. Hermès International Société en commandite par actions operates as a subsidiary of H51 SAS.

About Movado Group

Movado Group, Inc. designs, sources, markets, and distributes watches in the United States and internationally. The company operates in two segments, Watch and Accessory Brands, and Company Stores. The company offers its watches under the Movado, Concord, Ebel, Olivia Burton, and MVMT brands, as well as licensed brands comprising Coach, Tommy Hilfiger, HUGO BOSS, Lacoste, and Calvin Klein. It also designs, sources, markets, and distributes jewelry and other accessories; and provides after-sales and shipping services. The company’s customers include jewelry store chains, department stores, independent regional jewelers, network of independent distributors, online marketplaces, licensors’ retail stores, and third-party e-commerce retailers. It sells directly to consumers through its e-commerce platforms. The company was formerly known as North American Watch Corporation and changed its name to Movado Group, Inc. in 1996. Movado Group, Inc. was founded in 1961 and is headquartered in Paramus, New Jersey.