Financial Analysis: Columbia Sportswear (NASDAQ:COLM) vs. lululemon athletica inc. (LULU)
Columbia Sportswear (NASDAQ: COLM) and lululemon athletica inc. (NASDAQ:LULU) are both mid-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.
Earnings & Valuation
This table compares Columbia Sportswear and lululemon athletica inc.’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Columbia Sportswear||$2.41 billion||1.68||$319.52 million||$2.72||21.40|
|lululemon athletica inc.||$2.37 billion||3.45||$507.41 million||N/A||N/A|
lululemon athletica inc. has higher revenue, but lower earnings than Columbia Sportswear.
This is a breakdown of current ratings and price targets for Columbia Sportswear and lululemon athletica inc., as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|lululemon athletica inc.||4||15||18||0||2.38|
Columbia Sportswear presently has a consensus price target of $63.45, suggesting a potential upside of 9.01%. lululemon athletica inc. has a consensus price target of $65.03, suggesting a potential upside of 8.82%. Given Columbia Sportswear’s stronger consensus rating and higher possible upside, analysts clearly believe Columbia Sportswear is more favorable than lululemon athletica inc..
Risk & Volatility
Columbia Sportswear has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500. Comparatively, lululemon athletica inc. has a beta of 0.25, indicating that its stock price is 75% less volatile than the S&P 500.
Columbia Sportswear pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. lululemon athletica inc. does not pay a dividend. Columbia Sportswear pays out 26.5% of its earnings in the form of a dividend.
This table compares Columbia Sportswear and lululemon athletica inc.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|lululemon athletica inc.||12.21%||23.43%||19.27%|
Institutional and Insider Ownership
39.2% of Columbia Sportswear shares are held by institutional investors. Comparatively, 80.2% of lululemon athletica inc. shares are held by institutional investors. 58.9% of Columbia Sportswear shares are held by insiders. Comparatively, 0.3% of lululemon athletica inc. shares are held by 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.
lululemon athletica inc. beats Columbia Sportswear on 9 of the 15 factors compared between the two stocks.
About Columbia Sportswear
Columbia Sportswear Company is an apparel and footwear company. The Company designs, sources, markets and distributes outdoor lifestyle apparel, footwear, accessories and equipment under the Columbia, Mountain Hardwear, Sorel, prAna and other brands. Its geographic segments are the United States, Latin America and Asia Pacific (LAAP), Europe, Middle East and Africa (EMEA), and Canada. The Company develops and manages its merchandise in categories, including apparel, accessories and equipment, and footwear. It distributes its products through a mix of wholesale distribution channels, its own direct-to-consumer channels (retail stores and e-commerce), independent distributors and licensees. As of December 31, 2016, its products were sold in approximately 90 countries. In 59 of those countries, it sells to independent distributors to whom it has granted distribution rights. Contract manufacturers located outside the United States manufacture all of its products.
About lululemon athletica inc.
lululemon athletica inc. is a designer, distributor and retailer of athletic apparel. The Company operates through two segments: Company-operated stores and Direct to consumer. It is also engaged in the sale from outlets, showrooms, sales from temporary locations, sales to wholesale accounts, warehouse sales, and license and supply arrangements. Its direct to consumer segment generates revenue from its lululemon and ivivva e-commerce Websites, www.lululemon.com and www.ivivva.com, and other country and region specific Websites. It offers a range of apparel and accessories for women, men and female youth. The Company’s apparel assortment includes items, such as pants, shorts, tops, and jackets designed for healthy lifestyle and athletic activities, such as yoga, running, training, most other sweaty pursuits, and athletic wear for female youth. The Company also offers fitness-related accessories, including an array of items, such as bags, socks, underwear, yoga mats and water bottles.
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