K Swiss (NASDAQ: KSWS) and lululemon athletica (NASDAQ:LULU) are both cyclical consumer goods & services companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, earnings, profitability, dividends, valuation and analyst recommendations.
Institutional & Insider Ownership
79.5% of lululemon athletica shares are held by institutional investors. 0.3% of lululemon athletica shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This is a summary of current recommendations and price targets for K Swiss and lululemon athletica, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
lululemon athletica has a consensus target price of $70.28, suggesting a potential downside of 5.43%. Given lululemon athletica’s higher possible upside, analysts plainly believe lululemon athletica is more favorable than K Swiss.
Earnings and Valuation
This table compares K Swiss and lululemon athletica’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|lululemon athletica||$2.34 billion||4.29||$303.38 million||$2.01||36.97|
lululemon athletica has higher revenue and earnings than K Swiss. K Swiss is trading at a lower price-to-earnings ratio than lululemon athletica, indicating that it is currently the more affordable of the two stocks.
This table compares K Swiss and lululemon athletica’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility & Risk
K Swiss has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500. Comparatively, lululemon athletica has a beta of 0.19, indicating that its stock price is 81% less volatile than the S&P 500.
lululemon athletica beats K Swiss on 9 of the 10 factors compared between the two stocks.
About K Swiss
K-Swiss Inc. (K-Swiss) is engaged in designing, developing and marketing an array of footwear, apparel and accessories for athletic, sports and fitness activities and casual wear under the K-Swiss brand. The Company also designs, develops and markets footwear for adventurers for all terrains under the Palladium brand. The Company sells products primarily to footwear stores, pro shops, sporting goods stores and department stores. Internationally, as of December 31, 2011, K-Swiss had the right to market its products in 124 countries through eight international subsidiaries and 29 distributors. During the year ended December 31, 2011, approximately 60%, 21%, 17% and 2% of the Company’s footwear products were manufactured in China, Thailand, Vietnam and Indonesia, respectively. In May 2013, E.Land World Ltd. completed the acquisition of K Swiss Inc in a merger transaction.
About lululemon athletica
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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