Critical Comparison: J.Jill (NYSE:JILL) and Tapestry (NYSE:TPR)

J.Jill (NYSE:JILL) and Tapestry (NYSE:TPR) are both retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and price targets for J.Jill and Tapestry, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
J.Jill	2	3	2	0	2.00
Tapestry	0	5	16	0	2.76

J.Jill currently has a consensus target price of $18.00, indicating a potential upside of 7.40%. Tapestry has a consensus target price of $126.05, indicating a potential downside of 3.69%. Given J.Jill’s higher probable upside, equities research analysts clearly believe J.Jill is more favorable than Tapestry.

Dividends

J.Jill pays an annual dividend of $0.32 per share and has a dividend yield of 1.9%. Tapestry pays an annual dividend of $1.60 per share and has a dividend yield of 1.2%. J.Jill pays out 14.6% of its earnings in the form of a dividend. Tapestry pays out 142.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. J.Jill has raised its dividend for 1 consecutive years and Tapestry has raised its dividend for 3 consecutive years. J.Jill is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

40.7% of J.Jill shares are held by institutional investors. Comparatively, 90.8% of Tapestry shares are held by institutional investors. 4.4% of J.Jill shares are held by company insiders. Comparatively, 1.3% of Tapestry shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares J.Jill and Tapestry”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
J.Jill	$610.86 million	0.41	$39.48 million	$2.19	7.65
Tapestry	$7.01 billion	3.82	$183.20 million	$1.12	116.86

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

Volatility and Risk

J.Jill has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, Tapestry has a beta of 1.63, meaning that its stock price is 63% more volatile than the S&P 500.

Profitability

This table compares J.Jill and Tapestry’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
J.Jill	5.60%	36.33%	9.75%
Tapestry	3.77%	116.42%	17.30%

Summary

Tapestry beats J.Jill on 11 of the 17 factors compared between the two stocks.

About J.Jill

J.Jill, Inc. operates as an omnichannel retailer for women's apparel under the J.Jill brand in the United States. It offers apparel, footwear, and accessories, including scarves and jewelry. The company markets its products through retail stores, website, and catalogs. J.Jill, Inc. was founded in 1959 and is headquartered in Quincy, Massachusetts.

About Tapestry

Tapestry, Inc. provides luxury accessories and branded lifestyle products in the United States, Japan, Greater China, and internationally. The company operates in three segments: Coach, Kate Spade, and Stuart Weitzman. It offers women’s handbags; and women’s accessories, such as small leather goods which includes mini and micro handbags, money pieces, wristlets, pouches, and cosmetic cases, as well as novelty accessories including address books, time management and travel accessories, sketchbooks, and portfolios; and belts, key rings, and charms. The company also provides men products, which includes bag collections, such as business cases, computer bags, messenger-style bags, backpacks, and totes; small leather goods including wallets, card cases, travel organizers, and belts; and footwear, watches, fragrances, sunglasses, novelty accessories, and ready-to-wear items. In addition, it offers other products including women’s footwear and fragrances; eyewear and sunglasses; and jewelry, such as bracelets, necklaces, rings, and earrings, watches, and other women’s seasonal lifestyle apparel collections, including outerwear, ready-to-wear and cold weather accessories, such as gloves, scarves, and hats. Further, the company provides kids items, housewares, and home accessories, such as fashion bedding and tableware, stationery, and gifts. It offers its products through e-commerce sites and concession shop-in-shops, wholesale, and third-party distributors under the Coach, Kate Spade, and Stuart Weitzman brand names. The company was formerly known as Coach, Inc. and changed its name to Tapestry, Inc. in October 2017. Tapestry, Inc. was founded in 1941 and is headquartered in New York, New York.