Comparing Express (EXPR) and Hanesbrands (HBI)

Express (NYSE: EXPR) and Hanesbrands (NYSE:HBI) are both retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Analyst Ratings

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This is a summary of current ratings and price targets for Express and Hanesbrands, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Express 0 7 0 0 2.00
Hanesbrands 0 11 6 0 2.35

Express currently has a consensus target price of $8.94, suggesting a potential upside of 13.13%. Hanesbrands has a consensus target price of $24.53, suggesting a potential upside of 30.82%. Given Hanesbrands’ stronger consensus rating and higher possible upside, analysts clearly believe Hanesbrands is more favorable than Express.

Dividends

Hanesbrands pays an annual dividend of $0.60 per share and has a dividend yield of 3.2%. Express does not pay a dividend. Hanesbrands pays out 31.1% of its earnings in the form of a dividend. Hanesbrands has raised its dividend for 4 consecutive years.

Volatility and Risk

Express has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Hanesbrands has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Express 0.91% 4.45% 2.36%
Hanesbrands 0.96% 72.30% 10.04%

Institutional and Insider Ownership

99.1% of Express shares are held by institutional investors. Comparatively, 100.0% of Hanesbrands shares are held by institutional investors. 2.6% of Express shares are held by company insiders. Comparatively, 1.1% of Hanesbrands shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Express and Hanesbrands’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Express $2.14 billion 0.29 $19.36 million $0.36 21.94
Hanesbrands $6.47 billion 1.04 $61.89 million $1.93 9.72

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

Summary

Hanesbrands beats Express on 13 of the 17 factors compared between the two stocks.

About Express

Express, Inc. is a specialty apparel and accessories retailer offering both women’s and men’s merchandise. The Company targets women and men between 20 and 30 years old. It offers an assortment of fashionable apparel and accessories to address fashion needs across multiple aspects of lifestyles, including work, casual, jeanswear and going-out occasions. It is engaged in the operation of its brick-and-mortar retail and outlet stores, e-commerce operations and franchise operations. It sells its products through its e-commerce Website, www.express.com and its mobile application, and has franchise agreements with franchisees that operate Express locations in Latin America. It operated 656 stores across the United States, in Canada and in Puerto Rico, including 104 factory outlet stores, as of January 28, 2017. Its products are created by its in-house design team. Its portfolio of apparel products includes brands, such as Portofino shirt, Editor pant and 1MX shirt.

About Hanesbrands

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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