Tapestry vs LVMH Which Should You Buy?

LVMH Moët Hennessy Louis Vuitton SE and Tapestry, Inc. are two prominent companies in the luxury goods sector, each with a unique business model and approach to growth. While LVMH is known for its diverse portfolio of brands spanning fashion, cosmetics, and spirits, Tapestry focuses primarily on the luxury accessories market with its renowned Coach, Kate Spade, and Stuart Weitzman brands. Investors looking to capitalize on the upscale consumer market may find opportunities in both Tapestry and LVMH stocks, but should consider factors such as market trends, financial performance, and brand positioning before making investment decisions.

Tapestry or LVMH?

When comparing Tapestry and LVMH, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Tapestry and LVMH.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Tapestry has a dividend yield of 3.4%, while LVMH has a dividend yield of 2.34%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Tapestry reports a 5-year dividend growth of -0.75% year and a payout ratio of 39.95%. On the other hand, LVMH reports a 5-year dividend growth of 16.19% year and a payout ratio of 48.75%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Tapestry P/E ratio at 14.77 and LVMH's P/E ratio at 21.39. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Tapestry P/B ratio is 4.00 while LVMH's P/B ratio is 4.61.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Tapestry has seen a 5-year revenue growth of 0.37%, while LVMH's is 0.85%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Tapestry's ROE at 28.55% and LVMH's ROE at 22.19%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $51.34 for Tapestry and $636.49 for LVMH. Over the past year, Tapestry's prices ranged from $27.91 to $52.76, with a yearly change of 89.04%. LVMH's prices fluctuated between $600.83 and $958.69, with a yearly change of 59.56%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.