Critical Survey: Tailored Brands (TLRD) and Hanesbrands (HBI)

Tailored Brands (NYSE: TLRD) and Hanesbrands (NYSE:HBI) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Valuation & Earnings

This table compares Tailored Brands and Hanesbrands’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tailored Brands $3.30 billion 0.52 $96.70 million $2.20 15.55
Hanesbrands $6.47 billion 1.01 $61.89 million $1.93 9.42

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

Profitability

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

Net Margins Return on Equity Return on Assets
Tailored Brands 2.93% -245.27% 5.11%
Hanesbrands 1.08% 75.80% 9.76%

Volatility & Risk

Tailored Brands has a beta of 1.72, meaning that its stock price is 72% more volatile than the S&P 500. Comparatively, Hanesbrands has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Tailored Brands and Hanesbrands, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tailored Brands 0 1 4 0 2.80
Hanesbrands 0 11 7 0 2.39

Tailored Brands currently has a consensus target price of $16.25, suggesting a potential downside of 52.51%. Hanesbrands has a consensus target price of $24.33, suggesting a potential upside of 33.77%. Given Hanesbrands’ higher probable upside, analysts plainly believe Hanesbrands is more favorable than Tailored Brands.

Dividends

Tailored Brands pays an annual dividend of $0.72 per share and has a dividend yield of 2.1%. Hanesbrands pays an annual dividend of $0.60 per share and has a dividend yield of 3.3%. Tailored Brands pays out 32.7% of its earnings in the form of a dividend. Hanesbrands pays out 31.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Hanesbrands has raised its dividend for 4 consecutive years. Hanesbrands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

99.5% of Tailored Brands shares are held by institutional investors. Comparatively, 98.7% of Hanesbrands shares are held by institutional investors. 2.4% of Tailored Brands shares are held by company insiders. Comparatively, 1.1% of Hanesbrands shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Hanesbrands beats Tailored Brands on 9 of the 17 factors compared between the two stocks.

Tailored Brands Company Profile

Tailored Brands, Inc. operates as a specialty apparel retailer the United States, Puerto Rico, and Canada. It operates through two segments, Retail and Corporate Apparel. The Retail segment offers suits, suit separates, sport coats, slacks, formalwear, business casual, denim, sportswear, outerwear, dress shirts, shoes, and accessories for men. It also provides women's career and casual apparel, sportswear, and accessories; children's apparel; alteration services; and retail dry cleaning, laundry, and heirlooming services. As of February 3, 2018, this segment operated 1,477 stores under the Men's Wearhouse, Men's Wearhouse and Tux, Jos. A. Bank, Moores, Joseph Abboud, and K&G; and 38 retail dry cleaning, laundry, and heirlooming facilities. The Corporate Apparel segment provides corporate apparel uniforms and work wear to workforces under the Dimensions, Alexandra, Yaffy, and Twin Hill brands through various channels, including managed corporate accounts and catalogs, as well as through dimensions.co.uk, alexandra.co.uk, and twinhill.com Internet sites. This segment serves companies and organizations in the airline, retail grocery, retail, banking, quick service restaurant, car rental, distribution, travel and leisure, postal, security, healthcare, and public sectors. The company was formerly known as The Men's Wearhouse, Inc. and changed its name to Tailored Brands, Inc. in February 2016. Tailored Brands, Inc. was founded in 1973 and is based in Houston, Texas.

Hanesbrands Company Profile

Hanesbrands Inc., a consumer goods company, designs, manufactures, sources, and sells a range of basic apparel for men, women, and children in the United States. The company operates through three segments: Innerwear, Activewear, and International. It sells bras, panties, men's underwear, children's underwear, activewear, socks, hosiery, intimate apparel, shapewears, and home goods; and T-shirts, fleece, sport shirts, performance T-shirts and shorts, sports bras, and thermals, as well as licensed logo apparel in collegiate bookstores, mass retailers, and other channels. The company licenses its Champion name for footwear and sports accessories. Hanesbrands Inc. provides its products primarily under the Hanes, Champion, Maidenform, Bali, JMS/Just My Size, Polo Ralph Lauren, Playtex, DKNY, Donna Karan, Hanes Beefy-T, Gear for Sports, Alternative, Bonds, DIM, Sheridan, Nur Die/Nur Der, Lovable, Wonderbra, Berlei, Abanderado, Shock Absorber, Zorba, Explorer, Kendall, Sol y Oro, Bellinda, and L'eggs brand names. The company markets its products through retailers, wholesalers, and third party embellishers, as well as directly to consumers through Internet. As of December 30, 2017, it operated 245 outlet stores in the United States and the Commonwealth of Puerto Rico, as well as 475 retail and outlet stores internationally. The company also sells its products in Europe, Australia, Asia, Latin America, Canada, the Middle East, Africa, Mexico, and Brazil. Hanesbrands Inc. was founded in 1901 and is headquartered in Winston-Salem, North Carolina.

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