Hanesbrands (NYSE: HBI) and K Swiss (NASDAQ:KSWS) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitability, valuation and institutional ownership.

Profitability

This table compares Hanesbrands and K Swiss’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hanesbrands 9.43% 64.73% 10.21%
K Swiss N/A N/A N/A

Volatility & Risk

Hanesbrands has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500. Comparatively, K Swiss has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.

Valuation & Earnings

This table compares Hanesbrands and K Swiss’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hanesbrands $6.03 billion 1.23 $539.38 million $1.62 12.60
K Swiss N/A N/A N/A ($0.98) -4.84

Hanesbrands has higher revenue and earnings than K Swiss. K Swiss is trading at a lower price-to-earnings ratio than Hanesbrands, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

96.8% of Hanesbrands shares are owned by institutional investors. 1.1% of Hanesbrands shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Hanesbrands and K Swiss, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hanesbrands 0 9 8 0 2.47
K Swiss 0 0 0 0 N/A

Hanesbrands currently has a consensus price target of $25.81, suggesting a potential upside of 26.47%. Given Hanesbrands’ higher possible upside, research analysts clearly believe Hanesbrands is more favorable than K Swiss.

Dividends

Hanesbrands pays an annual dividend of $0.60 per share and has a dividend yield of 2.9%. K Swiss does not pay a dividend. Hanesbrands pays out 37.0% of its earnings in the form of a dividend. Hanesbrands has increased its dividend for 3 consecutive years.

Summary

Hanesbrands beats K Swiss on 12 of the 14 factors compared between the two stocks.

Hanesbrands Company Profile

Hanesbrands Inc. is a marketer of basic innerwear and activewear apparel in the Americas, Europe, Australia and Asia/Pacific under apparel brands, such as Hanes, Champion, Maidenform, DIM, Bali, Playtex, Bonds, JMS/Just My Size, Nur Die/Nur Der, L’eggs, Lovable, Wonderbra, Flexees, Gear for Sports and Berlei. The Company operates through four segments: Innerwear, Activewear, Direct to Consumer and International. The Innerwear segment focuses on core apparel products, such as intimate apparel, men’s underwear, women’s panties, children’s underwear, socks and hosiery. The Company operates in the activewear market through its Champion, Hanes and JMS/Just My Size brands. The Direct to Consumer segment operations include its domestic Company-operated outlet stores and Website operations that sell its branded products directly to consumers in the United States. The International segment includes products that primarily span across the innerwear and activewear segments.

K Swiss Company Profile

K-Swiss Inc. (K-Swiss) is engaged in designing, developing and marketing an array of footwear, apparel and accessories for athletic, sports and fitness activities and casual wear under the K-Swiss brand. The Company also designs, develops and markets footwear for adventurers for all terrains under the Palladium brand. The Company sells products primarily to footwear stores, pro shops, sporting goods stores and department stores. Internationally, as of December 31, 2011, K-Swiss had the right to market its products in 124 countries through eight international subsidiaries and 29 distributors. During the year ended December 31, 2011, approximately 60%, 21%, 17% and 2% of the Company’s footwear products were manufactured in China, Thailand, Vietnam and Indonesia, respectively. In May 2013, E.Land World Ltd. completed the acquisition of K Swiss Inc in a merger transaction.

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