Hanesbrands (NYSE: HBI) and Crocs (NASDAQ:CROX) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, analyst recommendations and institutional ownership.
Insider and Institutional Ownership
99.9% of Hanesbrands shares are held by institutional investors. Comparatively, 99.8% of Crocs shares are held by institutional investors. 1.1% of Hanesbrands shares are held by insiders. Comparatively, 1.4% of Crocs shares are held 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.
This is a summary of recent ratings and recommmendations for Hanesbrands and Crocs, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Hanesbrands presently has a consensus target price of $24.81, suggesting a potential upside of 30.66%. Crocs has a consensus target price of $10.17, suggesting a potential downside of 34.62%. Given Hanesbrands’ stronger consensus rating and higher probable upside, analysts clearly believe Hanesbrands is more favorable than Crocs.
This table compares Hanesbrands and Crocs’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
Hanesbrands has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, Crocs has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500.
Hanesbrands pays an annual dividend of $0.60 per share and has a dividend yield of 3.2%. Crocs does not pay a dividend. Hanesbrands pays out 400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Crocs has increased its dividend for 4 consecutive years.
Earnings and Valuation
This table compares Hanesbrands and Crocs’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Hanesbrands||$6.47 billion||1.06||$61.89 million||$0.15||126.60|
|Crocs||$1.02 billion||1.05||$10.23 million||($0.16)||-97.19|
Hanesbrands has higher revenue and earnings than Crocs. Crocs is trading at a lower price-to-earnings ratio than Hanesbrands, indicating that it is currently the more affordable of the two stocks.
Hanesbrands beats Crocs on 13 of the 17 factors compared between the two stocks.
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.
Crocs, Inc. is engaged in the design, development, manufacturing, marketing, distribution and sale of casual lifestyle footwear and accessories for men, women, and children. The Company’s segments include Americas, Asia Pacific and Europe. Its products include footwear and accessories that utilize its closed-cell resin, called Croslite, as well as casual lifestyle footwear that use a range of materials. Its Croslite material enables the Company to produce non-marking, and odor-resistant footwear. As of December 31, 2016, the Company sold its products in over 90 countries through domestic and international retailers and distributors, and directly to consumers through its company-operated retail stores, outlets, e-commerce store sites and kiosks. The Company’s sales channels include wholesale, which includes distributors, Crocs owned retail and Crocs e-commerce.
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