Critical Survey: TOD’S (OTCMKTS:TODGF) versus ON (NYSE:ONON)

ON (NYSE:ONON) and TOD’S (OTCMKTS:TODGF) are both consumer cyclical companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, profitability, valuation and earnings.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for ON and TOD’S, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ON	0	4	13	0	2.76
TOD’S	0	0	1	0	3.00

ON presently has a consensus price target of $37.13, suggesting a potential upside of 16.96%. Given ON’s higher probable upside, analysts clearly believe ON is more favorable than TOD’S.

Valuation and Earnings

This table compares ON and TOD’S’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ON	$2.00 billion	10.02	$88.67 million	$0.27	117.59
TOD’S	N/A	N/A	N/A	$2.91	12.92

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

Profitability

This table compares ON and TOD’S’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ON	4.04%	6.85%	4.52%
TOD’S	N/A	N/A	N/A

Insider and Institutional Ownership

33.1% of ON shares are held by institutional investors. Comparatively, 16.1% of TOD’S shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

ON beats TOD’S on 8 of the 10 factors compared between the two stocks.

About ON

On Holding AG engages in the development and distribution of sports products worldwide. The company offers athletic footwear, apparel, and accessories for high-performance running, outdoor, training, all-day activities, and tennis. It offers its products through independent retailers and distributors, online, and stores. The company was founded in 2010 and is headquartered in Zurich, Switzerland.

About TOD’S

TOD'S S.p.A., together with its subsidiaries, creates, produces, and distributes shoes, leather goods and accessories, and apparel in Italy, rest of Europe, the Americas, Greater China, and internationally. It distributes its products through directly operated single-brand stores (DOS), the e-commerce channels, franchised retail outlets, and a series of selected independent multi-brand stores under the TOD'S, HOGAN, FAY, and ROGER VIVIER brands. The company was founded in 1970 and is headquartered in Sant'Elpidio a Mare, Italy.