Adidas (OTCMKTS:ADDYY – Get Free Report) and lululemon athletica (NASDAQ:LULU – Get Free Report) are both large-cap consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, earnings, risk, valuation, analyst recommendations, profitability and institutional ownership.
Profitability
This table compares Adidas and lululemon athletica’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Adidas | 5.30% | 22.35% | 6.80% |
| lululemon athletica | 12.78% | 27.69% | 15.81% |
Risk and Volatility
Adidas has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500. Comparatively, lululemon athletica has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Adidas | 1 | 3 | 9 | 0 | 2.62 |
| lululemon athletica | 6 | 22 | 0 | 1 | 1.86 |
Adidas currently has a consensus target price of $146.02, indicating a potential upside of 71.49%. lululemon athletica has a consensus target price of $114.08, indicating a potential upside of 14.40%. Given Adidas’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Adidas is more favorable than lululemon athletica.
Earnings & Valuation
This table compares Adidas and lululemon athletica”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Adidas | $28.06 billion | 1.08 | $1.52 billion | $4.54 | 18.76 |
| lululemon athletica | $11.09 billion | 1.07 | $1.58 billion | $12.21 | 8.17 |
lululemon athletica has lower revenue, but higher earnings than Adidas. lululemon athletica is trading at a lower price-to-earnings ratio than Adidas, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
85.2% of lululemon athletica shares are owned by institutional investors. 0.5% of lululemon athletica shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Summary
lululemon athletica beats Adidas on 8 of the 15 factors compared between the two stocks.
About Adidas
adidas AG, together with its subsidiaries, designs, develops, produces, and markets athletic and sports lifestyle products in Europe, the Middle East, Africa, North America, Greater China, the Asia-Pacific, and Latin America. It offers footwear, apparel, and accessories and gear, such as bags and balls under the adidas brand; golf footwear and apparel under the adidas Golf brand; and outdoor footwear under the Five Ten brand. It sells its products through its own retail stores; mono-branded franchise stores and shop-in-shops; and wholesale and its e-commerce channels. The company was formerly known as adidas-Salomon AG and changed its name to adidas AG in June 2006. adidas AG was founded in 1920 and is headquartered in Herzogenaurach, Germany.
About lululemon athletica
Lululemon Athletica Inc., together with its subsidiaries, designs, distributes, and retails athletic apparel, footwear, and accessories under the lululemon brand for women and men. It offers pants, shorts, tops, and jackets for healthy lifestyle, such as yoga, running, training, and other activities. It also provides fitness-inspired accessories. The company sells its products through a chain of company-operated stores; outlets; interactive workout platform; yoga and fitness studios, university campus retailers, and other partners; license and supply arrangements; and temporary locations, as well as through mobile apps and lululemon.com e-commerce website. It has operations in the United States, Canada, Mainland China, Australia, South Korea, Hong Kong, Japan, New Zealand, Taiwan, Singapore, Malaysia, Macau, Thailand, the Asia Pacific, the United Kingdom, Germany, France, Ireland, Spain, the Netherlands, Sweden, Norway, Switzerland, Europe, the Middle East, and Africa. Lululemon Athletica Inc. was founded in 1998 and is based in Vancouver, Canada.
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