K Swiss (NASDAQ: KSWS) and Hanesbrands (NYSE:HBI) are both cyclical consumer goods & services companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, risk and profitability.

Valuation & Earnings

This table compares K Swiss and Hanesbrands’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
K Swiss N/A N/A N/A ($0.98) -4.84
Hanesbrands $6.03 billion 1.30 $539.38 million $1.62 13.25

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

Dividends

Hanesbrands pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. K Swiss does not pay a dividend. Hanesbrands pays out 37.0% of its earnings in the form of a dividend. K Swiss has raised its dividend for 3 consecutive years.

Analyst Ratings

This is a summary of recent recommendations for K Swiss and Hanesbrands, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
K Swiss 0 0 0 0 N/A
Hanesbrands 0 8 8 0 2.50

Hanesbrands has a consensus target price of $26.00, suggesting a potential upside of 21.16%. Given Hanesbrands’ higher probable upside, analysts plainly believe Hanesbrands is more favorable than K Swiss.

Profitability

This table compares K Swiss and Hanesbrands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
K Swiss N/A N/A N/A
Hanesbrands 9.43% 64.73% 10.21%

Institutional & Insider Ownership

96.9% of Hanesbrands shares are owned by institutional investors. 1.1% of Hanesbrands shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

K Swiss has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500. Comparatively, Hanesbrands has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500.

Summary

Hanesbrands beats K Swiss on 10 of the 13 factors compared between the two stocks.

K Swiss Company Profile

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.

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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