ON (NYSE:ONON) vs. Hennes & Mauritz (OTCMKTS:HNNMY) Critical Survey

Hennes & Mauritz (OTCMKTS:HNNMY) and ON (NYSE:ONON) are both large-cap retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, valuation, analyst recommendations, earnings and risk.

Analyst Recommendations

This is a summary of recent ratings and target prices for Hennes & Mauritz and ON, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hennes & Mauritz	2	5	0	1	2.00
ON	2	1	19	1	2.83

ON has a consensus price target of $64.20, suggesting a potential upside of 52.45%. Given ON’s stronger consensus rating and higher possible upside, analysts clearly believe ON is more favorable than Hennes & Mauritz.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hennes & Mauritz	4.80%	26.33%	6.42%
ON	4.45%	8.75%	5.10%

Insider and Institutional Ownership

0.0% of Hennes & Mauritz shares are held by institutional investors. Comparatively, 36.4% of ON shares are held by institutional investors. 68.6% of ON shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Hennes & Mauritz and ON”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hennes & Mauritz	$22.18 billion	1.20	$1.11 billion	$0.14	27.00
ON	$2.72 billion	9.75	$275.23 million	$0.45	93.58

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

Risk and Volatility

Hennes & Mauritz has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500. Comparatively, ON has a beta of 2.19, meaning that its stock price is 119% more volatile than the S&P 500.

Summary

ON beats Hennes & Mauritz on 9 of the 14 factors compared between the two stocks.

About Hennes & Mauritz

H & M Hennes & Mauritz AB (publ) provides clothing, accessories, footwear, cosmetics, home textiles, and homeware for women, men, and children worldwide. It offers sportswear, shoes, bags, beauty products, activewear, jeans, and ready-to-wear; and interior products, including bed linens, dinnerware, textiles, furniture, and lighting. The company provides its products under the H&M, H&M HOME, H&M Move, H&M Beauty, COS, Weekday, Monki, & Other Stories, ARKET, Afound, and Singular Society brand names. In addition, it operates Sellpy, a broad digital platform for second-hand fashion and other products; and Creator Studio, a global platform for merchandise design and production, as well as provides solutions to extend the useful life of unwanted garments through reuse and recycling under Looper Textile name. The company offers its products through online and physical stores. H & M Hennes & Mauritz AB (publ) was incorporated in 1943 and is headquartered in Stockholm, Sweden.

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.