Reviewing Groupon (GRPN) and Tiffany & Co. (TIF)

Tiffany & Co. (NYSE: TIF) and Groupon (NASDAQ:GRPN) are both retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Profitability

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This table compares Tiffany & Co. and Groupon’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tiffany & Co. 8.87% 16.32% 9.76%
Groupon 0.49% 0.22% 0.03%

Dividends

Tiffany & Co. pays an annual dividend of $2.00 per share and has a dividend yield of 2.0%. Groupon does not pay a dividend. Tiffany & Co. pays out 48.4% of its earnings in the form of a dividend. Tiffany & Co. has raised its dividend for 8 consecutive years.

Analyst Ratings

This is a summary of recent ratings and price targets for Tiffany & Co. and Groupon, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tiffany & Co. 0 8 9 0 2.53
Groupon 3 9 6 0 2.17

Tiffany & Co. presently has a consensus price target of $107.53, suggesting a potential upside of 9.23%. Groupon has a consensus price target of $4.88, suggesting a potential upside of 10.13%. Given Groupon’s higher probable upside, analysts plainly believe Groupon is more favorable than Tiffany & Co..

Insider & Institutional Ownership

83.3% of Tiffany & Co. shares are owned by institutional investors. Comparatively, 63.6% of Groupon shares are owned by institutional investors. 1.4% of Tiffany & Co. shares are owned by company insiders. Comparatively, 23.4% of Groupon shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Tiffany & Co. has a beta of 1.77, suggesting that its stock price is 77% more volatile than the S&P 500. Comparatively, Groupon has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.

Earnings and Valuation

This table compares Tiffany & Co. and Groupon’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tiffany & Co. $4.17 billion 2.93 $370.10 million $4.13 23.84
Groupon $2.84 billion 0.87 $14.04 million ($0.03) -147.67

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

Summary

Tiffany & Co. beats Groupon on 14 of the 17 factors compared between the two stocks.

About Tiffany & Co.

Tiffany & Co., through its subsidiaries, designs, manufactures, and retails jewelry and other items in the Americas, the Asia-Pacific, Japan, Europe, and internationally. The company offers jewelry collections, engagement rings, and wedding bands. It also sells timepieces, leather goods, sterling silver goods, china, crystal, stationery, eyewear, fragrances, and other accessories; and wholesales diamonds and earnings. The company sells its products through retail, Internet and catalog, business-to-business, and wholesale distribution channels. As of January 31, 2018, it operated 315 stores, including 124 stores in the Americas, 87 stores in the Asia-Pacific, 54 stores in Japan, 46 stores in Europe, and 4 stores in the United Arab Emirates. Tiffany & Co. was founded in 1837 and is headquartered in New York, New York.

About Groupon

Groupon, Inc. operates online local commerce marketplaces that connect merchants to consumers by offering goods and services at a discount in North America and internationally. The company provides deals in various categories, including events and activities, beauty and spa, health and fitness, food and drink, home and garden, and automotive; and deals on various product lines, such as electronics, sporting goods, jewelries, toys, household items, and apparel, as well as provides discounted and market rates for hotel, airfare, and package deals. It offers its deal offerings to customers through Websites; search engines; mobile applications and mobile Web browsers, which enable consumers to browse, purchase, manage, and redeem deals on mobile devices; emails; affiliate channels; display advertising; and television and radio advertising. The company was formerly known as ThePoint.com, Inc. and changed its name to Groupon, Inc. in October 2008. The company was founded in 2008 and is headquartered in Chicago, Illinois. Groupon, Inc. is a subsidiary of The Point, LLC.

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