Duluth Holdings (NASDAQ: DLTH) and lululemon athletica inc. (NASDAQ:LULU) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, valuation, institutional ownership, profitability and analyst recommendations.

Volatility & Risk

Duluth Holdings has a beta of 0.19, indicating that its share price is 81% less volatile than the S&P 500. Comparatively, lululemon athletica inc. has a beta of 0.22, indicating that its share price is 78% less volatile than the S&P 500.

Insider and Institutional Ownership

33.5% of Duluth Holdings shares are held by institutional investors. Comparatively, 79.6% of lululemon athletica inc. shares are held by institutional investors. 70.4% of Duluth Holdings 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 stock is poised for long-term growth.

Profitability

This table compares Duluth Holdings and lululemon athletica inc.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Duluth Holdings 4.64% 17.05% 11.69%
lululemon athletica inc. 11.68% 22.51% 18.58%

Analyst Ratings

This is a summary of current ratings and target prices for Duluth Holdings and lululemon athletica inc., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Duluth Holdings 0 3 5 0 2.63
lululemon athletica inc. 3 15 19 0 2.43

Duluth Holdings currently has a consensus price target of $27.01, suggesting a potential upside of 39.93%. lululemon athletica inc. has a consensus price target of $65.71, suggesting a potential upside of 5.40%. Given Duluth Holdings’ stronger consensus rating and higher probable upside, equities analysts plainly believe Duluth Holdings is more favorable than lululemon athletica inc..

Earnings and Valuation

This table compares Duluth Holdings and lululemon athletica inc.’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Duluth Holdings $391.17 million 1.60 $35.79 million $0.58 33.28
lululemon athletica inc. $2.37 billion 3.30 $507.41 million $2.08 29.97

lululemon athletica inc. has higher revenue and earnings than Duluth Holdings. lululemon athletica inc. is trading at a lower price-to-earnings ratio than Duluth Holdings, indicating that it is currently the more affordable of the two stocks.

Summary

lululemon athletica inc. beats Duluth Holdings on 10 of the 14 factors compared between the two stocks.

About Duluth Holdings

Duluth Holdings Inc. is a lifestyle brand of men’s and women’s casual wear, workwear and accessories. The Company offers a line of functional products, such as its Longtail T shirts, Buck Naked underwear and Fire Hose work pants. The Company’s segments include direct and retail. The direct segment includes revenues from the Company’s Website and catalogs. The retail segment includes revenues from the Company’s retail and outlet stores. The Company offers its products under the Duluth Trading brand. The Company’s Website, www.duluthtrading.com, serves as a storefront for its product assortment. As of January 29, 2017, the Company operated 14 retail stores and two outlet stores. The Company’s stores range in size from approximately 6,000 to 14,000 selling square feet. The Company’s products also include Ballroom jeans, Duluthflex clothing, Armachillo shirts, Dry on the Fly pants, Armachillo underwear and No-Yank Tank.

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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