Financial Survey: Hanesbrands (HBI) vs. K Swiss (KSWS)

K Swiss (NASDAQ: KSWS) and Hanesbrands (NYSE:HBI) are both apparel & accessories – nec companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, profitability, analyst recommendations, valuation and risk.

Institutional & 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 large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for K Swiss and Hanesbrands, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
K Swiss 0 0 0 0 N/A
Hanesbrands 0 9 7 0 2.44

Hanesbrands has a consensus price target of $25.40, indicating a potential upside of 13.29%. Given Hanesbrands’ higher probable upside, analysts clearly believe Hanesbrands is more favorable than K Swiss.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
K Swiss N/A N/A N/A ($0.98) -4.84
Hanesbrands $6.03 billion 1.36 $539.38 million $1.62 13.84

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.

Profitability

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

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

Volatility & Risk

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

Dividends

Hanesbrands pays an annual dividend of $0.60 per share and has a dividend yield of 2.7%. K Swiss does not pay a dividend. Hanesbrands pays out 37.0% of its earnings in the form of a dividend. K Swiss has increased its dividend for 4 consecutive years.

Summary

Hanesbrands beats K Swiss on 11 of the 14 factors compared between the two stocks.

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.

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.

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