Gildan Activewear (NYSE: GIL) and Differential Brands Group (NASDAQ:DFBG) are both cyclical consumer goods & services companies, but which is the better business? We will contrast the two companies based on the strength of their risk, profitability, earnings, dividends, analyst recommendations, valuation and institutional ownership.
Earnings & Valuation
This table compares Gildan Activewear and Differential Brands Group’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Gildan Activewear | $2.68 billion | 2.56 | $567.29 million | $1.65 | 18.55 |
| Differential Brands Group | $155.65 million | 0.16 | $3.42 million | ($1.07) | -1.78 |
Gildan Activewear has higher revenue and earnings than Differential Brands Group. Differential Brands Group is trading at a lower price-to-earnings ratio than Gildan Activewear, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent recommendations for Gildan Activewear and Differential Brands Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Gildan Activewear | 0 | 6 | 4 | 0 | 2.40 |
| Differential Brands Group | 0 | 0 | 1 | 0 | 3.00 |
Gildan Activewear currently has a consensus price target of $35.33, indicating a potential upside of 15.47%. Differential Brands Group has a consensus price target of $5.00, indicating a potential upside of 163.16%. Given Differential Brands Group’s stronger consensus rating and higher possible upside, analysts plainly believe Differential Brands Group is more favorable than Gildan Activewear.
Dividends
Gildan Activewear pays an annual dividend of $0.37 per share and has a dividend yield of 1.2%. Differential Brands Group does not pay a dividend. Gildan Activewear pays out 22.4% of its earnings in the form of a dividend. Differential Brands Group has increased its dividend for 4 consecutive years.
Volatility and Risk
Gildan Activewear has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Differential Brands Group has a beta of -1.72, suggesting that its stock price is 272% less volatile than the S&P 500.
Profitability
This table compares Gildan Activewear and Differential Brands Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Gildan Activewear | 15.06% | 20.64% | 13.84% |
| Differential Brands Group | -8.85% | -29.02% | -7.53% |
Institutional & Insider Ownership
75.7% of Gildan Activewear shares are owned by institutional investors. Comparatively, 1.7% of Differential Brands Group shares are owned by institutional investors. 62.5% of Differential Brands Group shares are owned by company insiders. 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
Gildan Activewear beats Differential Brands Group on 11 of the 16 factors compared between the two stocks.
About Gildan Activewear
Gildan Activewear Inc. is a manufacturer and marketer of branded basic family apparel, including T-shirts, fleece, sport shirts, underwear, socks, hosiery and shapewear. The Company operates through two segments: Printwear and Branded Apparel. The Printwear segment designs, manufactures, sources, markets, and distributes undecorated activewear products. The Branded Apparel segment designs, manufactures, sources, markets, and distributes branded family apparel, which includes athletic, casual and dress socks, underwear, activewear, sheer hosiery, legwear, and shapewear products, which are sold to retailers in the United States and Canada. The Company sells its products under various brands, including the Gildan, Gold Toe, Anvil, Comfort Colors, American Apparel, Alstyle, Secret, Silks, Kushyfoot, Secret Silky, Therapy Plus, Peds, and MediPeds brands. The Company distributes its products in printwear markets in the United States, Canada, Mexico, Europe, Asia-Pacific and Latin America.
About Differential Brands Group
Differential Brands Group Inc., formerly Joe’s Jeans Inc., is engaged in the design, development and marketing of apparel products, which include denim jeans, related casual wear and accessories. The Company offers its products under various brands, such as Hudson, Robert Graham and SWIMS. Its segments are Wholesale and Retail. Its Wholesale segment consists of sales of Hudson products to retailers, specialty stores and international distributors. Its Retail segment consists of sales of its products to consumers through its retail Internet sites for Hudson products. The Hudson product line includes women’s, men’s and children’s denim jeans, pants and other bottoms. The Robert Graham product line includes men’s sport shirts, pants, sweaters, knits, t-shirts, sportcoats, outerwear and swimwear. Through SWIMS brand, it distributes a range of footwear, swimwear, outerwear, ready-to-wear and accessories across the world through department stores, independent specialty and luxury resorts.
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