Analyzing ON (NYSE:ONON) & Abercrombie & Fitch (NYSE:ANF)

ON (NYSE:ONON) and Abercrombie & Fitch (NYSE:ANF) are both retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, dividends, institutional ownership, profitability and analyst recommendations.

Risk & Volatility

ON has a beta of 2.25, indicating that its share price is 125% more volatile than the S&P 500. Comparatively, Abercrombie & Fitch has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for ON and Abercrombie & Fitch, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ON	0	2	18	2	3.00
Abercrombie & Fitch	0	3	6	0	2.67

ON presently has a consensus price target of $63.85, indicating a potential upside of 22.35%. Abercrombie & Fitch has a consensus price target of $110.63, indicating a potential upside of 28.38%. Given Abercrombie & Fitch’s higher probable upside, analysts plainly believe Abercrombie & Fitch is more favorable than ON.

Earnings & Valuation

This table compares ON and Abercrombie & Fitch”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ON	$2.63 billion	12.48	$275.23 million	$0.70	74.55
Abercrombie & Fitch	$4.95 billion	0.83	$566.22 million	$10.16	8.48

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

Profitability

This table compares ON and Abercrombie & Fitch’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ON	7.81%	14.79%	8.83%
Abercrombie & Fitch	10.60%	42.32%	16.76%

Institutional & Insider Ownership

36.4% of ON shares are owned by institutional investors. 2.3% of Abercrombie & Fitch shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Abercrombie & Fitch beats ON on 8 of the 15 factors compared between the two stocks.

About ON

On Holding AG engages in the development and distribution of sports products such as footwear, apparel, and accessories for high-performance running, outdoor, all-day activities, and tennis. It sells its products worldwide through independent retailers and global distributors, its own online presence, and its own stores. The company was founded by David Allemann, Olivier Bernhard, and Caspar Coppetti in January 2010 and is headquartered in Zurich, Switzerland.

About Abercrombie & Fitch

Abercrombie & Fitch Co. engages in the retail of apparel, personal care products, and accessories. The firm operates through following geographical segments: Americas, EMEA and APAC. The Americas segment includes operations in North America and South America. The EMEA segment includes operations in Europe, the Middle East and Africa. The APAC segment includes operations in the Asia-Pacific region, including Asia and Oceania. The company was founded by David Abercrombie in 1892 and is headquartered in New Albany, OH.