Under Armour (NYSE: UAA) and Gildan Activewear (NYSE:GIL) are both mid-cap consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Under Armour and Gildan Activewear, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Under Armour 10 21 6 0 1.89
Gildan Activewear 0 6 4 0 2.40

Under Armour presently has a consensus price target of $23.58, indicating a potential upside of 25.21%. Gildan Activewear has a consensus price target of $35.33, indicating a potential upside of 16.00%. Given Under Armour’s higher possible upside, research analysts clearly believe Under Armour is more favorable than Gildan Activewear.

Institutional and Insider Ownership

29.6% of Under Armour shares are owned by institutional investors. Comparatively, 75.7% of Gildan Activewear shares are owned by institutional investors. 16.4% of Under Armour shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Under Armour and Gildan Activewear’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Under Armour $4.98 billion 1.67 $526.36 million $0.48 39.23
Gildan Activewear $2.68 billion 2.55 $567.29 million $1.65 18.46

Gildan Activewear has higher revenue, but lower earnings than Under Armour. Gildan Activewear is trading at a lower price-to-earnings ratio than Under Armour, indicating that it is currently the more affordable of the two stocks.

Dividends

Gildan Activewear pays an annual dividend of $0.37 per share and has a dividend yield of 1.2%. Under Armour does not pay a dividend. Gildan Activewear pays out 22.4% of its earnings in the form of a dividend. Gildan Activewear has raised its dividend for 4 consecutive years.

Volatility & Risk

Under Armour has a beta of -0.07, meaning that its stock price is 107% less volatile than the S&P 500. Comparatively, Gildan Activewear has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Profitability

This table compares Under Armour and Gildan Activewear’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Under Armour 4.38% 10.93% 5.91%
Gildan Activewear 14.16% 18.65% 12.68%

Summary

Gildan Activewear beats Under Armour on 11 of the 17 factors compared between the two stocks.

Under Armour Company Profile

Under Armour, Inc. is engaged in the development, marketing and distribution of branded performance apparel, footwear and accessories for men, women and youth. The Company’s segments include North America, consisting of the United States and Canada; Europe, the Middle East and Africa (EMEA); Asia-Pacific; Latin America, and Connected Fitness. Its products are sold across the world and worn by athletes at all levels, from youth to professional, on playing fields around the globe, as well as by consumers with active lifestyles. The Company sells its branded apparel, footwear and accessories in North America through its wholesale and direct to consumer channels. As of December 31, 2016, the Company had approximately 151 factory house stores in North America primarily located in outlet centers throughout the United States. In addition, the Company distributes its products in North America through third-party logistics providers with primary locations in Canada, New Jersey and Florida.

Gildan Activewear Company Profile

Gildan Activewear Inc. is a manufacturer and marketer of branded basic family apparel, including T-shirts, fleece, sport shirts, underwear, socks, hosiery and shapewear. The Company operates through two segments: Printwear and Branded Apparel. The Printwear segment designs, manufactures, sources, markets, and distributes undecorated activewear products. The Branded Apparel segment designs, manufactures, sources, markets, and distributes branded family apparel, which includes athletic, casual and dress socks, underwear, activewear, sheer hosiery, legwear, and shapewear products, which are sold to retailers in the United States and Canada. The Company sells its products under various brands, including the Gildan, Gold Toe, Anvil, Comfort Colors, American Apparel, Alstyle, Secret, Silks, Kushyfoot, Secret Silky, Therapy Plus, Peds, and MediPeds brands. The Company distributes its products in printwear markets in the United States, Canada, Mexico, Europe, Asia-Pacific and Latin America.

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