Analyzing Adidas (OTCMKTS:ADDYY) & PVH (NYSE:PVH)

Adidas (OTCMKTS:ADDYY) and PVH (NYSE:PVH) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, risk, profitability, institutional ownership and earnings.

Profitability

This table compares Adidas and PVH’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%
PVH	-1.89%	11.94%	5.04%

Dividends

Adidas pays an annual dividend of $1.17 per share and has a dividend yield of 1.4%. PVH pays an annual dividend of $0.15 per share and has a dividend yield of 0.2%. Adidas pays out 25.8% of its earnings in the form of a dividend. PVH pays out -4.1% 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.

Earnings & Valuation

This table compares Adidas and PVH”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Adidas	$28.06 billion	1.05	$1.52 billion	$4.54	18.15
PVH	$8.92 billion	0.36	$25.30 million	($3.70)	-19.08

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

Volatility & Risk

Adidas has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, PVH has a beta of 1.72, indicating that its stock price is 72% more volatile than the S&P 500.

Institutional & Insider Ownership

97.3% of PVH shares are owned by institutional investors. 1.5% of PVH shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Adidas and PVH, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Adidas	1	3	10	0	2.64
PVH	2	6	6	0	2.29

Adidas presently has a consensus price target of $146.02, suggesting a potential upside of 77.17%. PVH has a consensus price target of $86.55, suggesting a potential upside of 22.62%. Given Adidas’ stronger consensus rating and higher possible upside, research analysts clearly believe Adidas is more favorable than PVH.

Summary

Adidas beats PVH on 12 of the 16 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 PVH

PVH Corp. operates as an apparel company in the United States and internationally. The company operates through Tommy Hilfiger North America, Tommy Hilfiger International, Calvin Klein North America, Calvin Klein International, and Heritage Brands Wholesale segments. It designs and markets men's, women's, and children's branded apparel, footwear and accessories, underwear, sleepwear, outerwear, home furnishings, luggage, dresses, suits and swimwear, activewear, sportswear, socks and accessories, outerwear, golf products, footwear, watches and jewelry, eyeglasses and non-ophthalmic sunglasses, jeans wear, performance apparel, intimate apparel, dress shirts, handbags, fragrance, small leather goods, and other related products; and men's and boy's tailored clothing products, duvets, pillows, mattress pads and toppers, and feather beds. The company offers its products under its own brands, such as TOMMY HILFIGER, TOMMY JEANS, Calvin Klein, CK Calvin Klein, Calvin Klein Jeans, Calvin Klein Underwear, and Calvin Klein Performance, as well as various other owned, licensed, and private label brands. It distributes its products at wholesale in department, chain, and specialty stores; through warehouse clubs, mass market, and off-price and independent retailers; and through company-operated full-price, outlet stores, and concession locations; and through digital commerce sites. PVH Corp. was founded in 1881 and is based in New York, New York.