V.F. Corporation (NYSE: VFC) and Hanesbrands (NYSE:HBI) are both mid-cap consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, valuation, institutional ownership and analyst recommendations.

Institutional & Insider Ownership

89.1% of V.F. Corporation shares are owned by institutional investors. Comparatively, 94.4% of Hanesbrands shares are owned by institutional investors. 1.6% of V.F. Corporation shares are owned by insiders. Comparatively, 1.1% of Hanesbrands shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares V.F. Corporation and Hanesbrands’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
V.F. Corporation $12.01 billion 2.05 $1.87 billion $2.59 24.10
Hanesbrands $6.36 billion 1.45 $1.05 billion $1.52 16.63

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

Dividends

V.F. Corporation pays an annual dividend of $1.68 per share and has a dividend yield of 2.7%. Hanesbrands pays an annual dividend of $0.60 per share and has a dividend yield of 2.4%. V.F. Corporation pays out 64.9% of its earnings in the form of a dividend. Hanesbrands pays out 39.5% 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. V.F. Corporation has increased its dividend for 3 consecutive years and Hanesbrands has increased its dividend for 44 consecutive years.

Analyst Ratings

This is a summary of recent ratings and price targets for V.F. Corporation and Hanesbrands, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
V.F. Corporation 1 15 5 0 2.19
Hanesbrands 0 4 7 0 2.64

V.F. Corporation currently has a consensus price target of $60.61, indicating a potential downside of 2.91%. Hanesbrands has a consensus price target of $27.30, indicating a potential upside of 8.03%. Given Hanesbrands’ stronger consensus rating and higher possible upside, analysts plainly believe Hanesbrands is more favorable than V.F. Corporation.

Profitability

This table compares V.F. Corporation and Hanesbrands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
V.F. Corporation 9.23% 27.44% 12.68%
Hanesbrands 9.02% 64.80% 10.11%

Risk & Volatility

V.F. Corporation has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Hanesbrands has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.

Summary

V.F. Corporation beats Hanesbrands on 10 of the 17 factors compared between the two stocks.

V.F. Corporation Company Profile

V.F. Corporation (VF) is engaged in the design, production, procurement, marketing and distribution of branded lifestyle apparel, footwear and related products. The Company’s segments include Outdoor & Action Sports, Jeanswear, Imagewear and Sportswear. Its Outdoor & Action Sports Coalition is a group of authentic outdoor and activity-based lifestyle brands. Its product offerings include apparel, footwear, equipment, backpacks, luggage and accessories. Its Imagewear coalition consists of the Image business. Its Wrangler brand offers denim, apparel, accessories and footwear through mass merchants, specialty stores and department stores in the United States, VF-operated stores and online at www.wrangler.com. The Sportswear coalition consists of the Nautica and Kipling brand businesses in North America (the Kipling brand outside of North America is managed by the Outdoor & Action Sports coalition).

Hanesbrands Company Profile

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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