Three Reasons to Buy Coach, Inc. (COH) Stock Now

That trend is even more pronounced overseas; in China, for instance, given the size of the Men’s opportunity, Coach plans to open at least seven new dual-gender stores during the current quarter alone. In Japan, management says most of the 11 net new locations they plan to add in fiscal 2013 will be dedicated to men’s products.

Of course, as fellow Fool Tamara Rutter pointed out recently, the fact that Coach is marching along nicely doesn’t mean they should ignore the threat of other growing luxury apparel companies, like Michael Kors Holdings Ltd (NYSE:KORS). Last month, Michael Kors Holdings Ltd (NYSE:KORS) announced an impressive fourth quarter, during which retail revenue increased 58.8% on incredible 36.7% same-store sales growth. That’s why Coach is increasingly striving to market itself as a stickier “lifestyle” brand to consumers, to differentiate themselves from the fast-growing competition.

Foolish takeaway
Then again, that doesn’t mean both companies can’t peacefully coexist in the world of luxury retail.

Unlike Coach, Michael Kors Holdings Ltd (NYSE:KORS) doesn’t offer a dividend. In addition, all that growth has Michael Kors stock trading at a premium of more than 30 times last year’s earnings, and 18 times next year’s estimates.

Compare that to shares of Coach, Inc. (NYSE:COH), which trade around 15 times last year’s earnings and 13.6 times next year’s estimates, and its price looks more than fair. In the end, when I add that to Coach’s shareholder-friendly policies, international growth, and opportunities in men’s accessories, I’m convinced that patient investors who buy Coach stock at today’s prices will be more than happy with the long-term results.

The article 3 Reasons to Buy Coach Stock Now originally appeared on Fool.com and is written by Steve Symington.

Fool contributor Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Coach. The Motley Fool owns shares of Coach.

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