Critical Comparison: G-III Apparel Group (NASDAQ:GIII) versus Tefron (OTCMKTS:TFRFF)

G-III Apparel Group (NASDAQ:GIII) and Tefron (OTCMKTS:TFRFF) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Institutional & Insider Ownership

92.1% of G-III Apparel Group shares are owned by institutional investors. 13.0% of G-III Apparel Group shares are owned by company insiders. Comparatively, 53.3% of Tefron shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

G-III Apparel Group pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. Tefron pays an annual dividend of $0.12 per share and has a dividend yield of 1.9%. G-III Apparel Group pays out 12.0% of its earnings in the form of a dividend. Tefron pays out 30.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Profitability

This table compares G-III Apparel Group and Tefron’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
G-III Apparel Group	4.89%	9.37%	6.22%
Tefron	2.14%	6.72%	3.44%

Valuation and Earnings

This table compares G-III Apparel Group and Tefron”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
G-III Apparel Group	$3.18 billion	0.41	$193.57 million	$3.33	9.23
Tefron	$293.86 million	N/A	$15.11 million	$0.40	16.08

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for G-III Apparel Group and Tefron, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
G-III Apparel Group	1	4	2	0	2.14
Tefron	0	0	0	0	0.00

G-III Apparel Group currently has a consensus price target of $31.20, suggesting a potential upside of 1.53%. Given G-III Apparel Group’s stronger consensus rating and higher probable upside, research analysts plainly believe G-III Apparel Group is more favorable than Tefron.

Volatility & Risk

G-III Apparel Group has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500. Comparatively, Tefron has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500.

Summary

G-III Apparel Group beats Tefron on 12 of the 15 factors compared between the two stocks.

About G-III Apparel Group

G-III Apparel Group, Ltd. designs, sources, and markets women's and men's apparel in the United States and internationally. The company operates through two segments, Wholesale Operations and Retail Operations. Its products include outerwear, dresses, sportswear, swimwear, women's suits, and women's performance wear; and women's handbags, footwear, small leather goods, cold weather accessories, and luggage. The company markets apparel and other products under the proprietary brands, including DKNY, Donna Karan, Karl Lagerfeld, Karl Lagerfeld Paris, Vilebrequin, G.H. Bass, Eliza J, Jessica Howard, Andrew Marc, Marc New York, Wilsons Leather, Sonia Rykiel, and G-III Sports by Carl Banks; and licensed brands, such as Calvin Klein, Tommy Hilfiger, Levi's, Guess?, Kenneth Cole, Cole Haan, Vince Camuto, Margaritaville, and Dockers. It has licenses with the National Football League, National Basketball Association, Major League Baseball, and National Hockey League, as well as approximately 150 U.S. colleges and universities. The company offers its products to department, specialty, and mass merchant retail stores. It also sells its products online. G-III Apparel Group, Ltd. was founded in 1956 and is based in New York, New York.

About Tefron

Tefron Ltd. engages in the design, development, production, marketing, and sale of intimate apparel and activewear, and leisurewear worldwide. The company through Brands and Retail segments. It offers women’s intimate, and active and lounge wear; and men’s underwear, activewear, and baselayer products. Tefron Ltd. was incorporated in 1977 and is headquartered in Misgav, Israel.