Head-To-Head Survey: Hanesbrands (HBI) & lululemon athletica inc. (LULU)
Hanesbrands (NYSE: HBI) and lululemon athletica inc. (NASDAQ:LULU) are both mid-cap consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, profitability, institutional ownership, analyst recommendations, valuation, dividends and risk.
Valuation & Earnings
This table compares Hanesbrands and lululemon athletica inc.’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Hanesbrands||$6.36 billion||1.36||$1.05 billion||$1.52||15.65|
|lululemon athletica inc.||$2.44 billion||3.51||$519.98 million||$2.08||30.44|
Hanesbrands has higher revenue and earnings than lululemon athletica inc.. Hanesbrands is trading at a lower price-to-earnings ratio than lululemon athletica inc., indicating that it is currently the more affordable of the two stocks.
Hanesbrands pays an annual dividend of $0.60 per share and has a dividend yield of 2.5%. lululemon athletica inc. does not pay a dividend. Hanesbrands pays out 39.5% of its earnings in the form of a dividend. lululemon athletica inc. has increased its dividend for 3 consecutive years.
This table compares Hanesbrands 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.||11.68%||22.51%||18.58%|
This is a breakdown of recent ratings and price targets for Hanesbrands and lululemon athletica inc., as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|lululemon athletica inc.||3||16||18||0||2.41|
Hanesbrands currently has a consensus price target of $27.38, suggesting a potential upside of 15.11%. lululemon athletica inc. has a consensus price target of $65.83, suggesting a potential upside of 3.98%. Given Hanesbrands’ stronger consensus rating and higher possible upside, equities analysts plainly believe Hanesbrands is more favorable than lululemon athletica inc..
Institutional and Insider Ownership
94.4% of Hanesbrands shares are held by institutional investors. Comparatively, 80.4% of lululemon athletica inc. shares are held by institutional investors. 1.1% of Hanesbrands 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.
Risk & Volatility
Hanesbrands has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, lululemon athletica inc. has a beta of 0.2, suggesting that its stock price is 80% less volatile than the S&P 500.
Hanesbrands beats lululemon athletica inc. on 9 of the 17 factors compared between the two stocks.
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.
lululemon athletica inc. Company Profile
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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