Weyco Group (NASDAQ: WEYS) and Skechers U.S.A. (NYSE:SKX) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, profitabiliy, analyst recommendations and institutional ownership.

Profitability

This table compares Weyco Group and Skechers U.S.A.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Weyco Group 5.57% 6.83% 5.27%
Skechers U.S.A. 6.56% 14.20% 10.30%

Earnings & Valuation

This table compares Weyco Group and Skechers U.S.A.’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Weyco Group $287.15 million 1.01 $26.51 million $1.52 18.42
Skechers U.S.A. $3.67 billion 1.18 $440.41 million $1.54 17.83

Skechers U.S.A. has higher revenue and earnings than Weyco Group. Skechers U.S.A. is trading at a lower price-to-earnings ratio than Weyco Group, indicating that it is currently the more affordable of the two stocks.

Dividends

Weyco Group pays an annual dividend of $0.88 per share and has a dividend yield of 3.1%. Skechers U.S.A. does not pay a dividend. Weyco Group pays out 57.9% of its earnings in the form of a dividend.

Volatility & Risk

Weyco Group has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Skechers U.S.A. has a beta of 0.31, suggesting that its share price is 69% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Weyco Group and Skechers U.S.A., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Weyco Group 0 1 0 0 2.00
Skechers U.S.A. 1 4 7 0 2.50

Weyco Group presently has a consensus price target of $26.00, indicating a potential downside of 7.14%. Skechers U.S.A. has a consensus price target of $29.73, indicating a potential upside of 8.26%. Given Skechers U.S.A.’s stronger consensus rating and higher possible upside, analysts clearly believe Skechers U.S.A. is more favorable than Weyco Group.

Insider and Institutional Ownership

32.1% of Weyco Group shares are owned by institutional investors. Comparatively, 65.6% of Skechers U.S.A. shares are owned by institutional investors. 42.8% of Weyco Group shares are owned by company insiders. Comparatively, 21.7% of Skechers U.S.A. shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Skechers U.S.A. beats Weyco Group on 12 of the 16 factors compared between the two stocks.

About Weyco Group

Weyco Group, Inc. is engaged in the design and distribution of footwear. The Company designs and markets footwear for men, women and children. The Company operates through two segments: the North American wholesale segment (wholesale) and the North American retail segment (retail). The Company also has other wholesale and retail businesses overseas, which include its businesses in Australia, South Africa and Asia Pacific (collectively known as Florsheim Australia), and its wholesale and retail businesses in Europe (Florsheim Europe). Its products consist of leather dress shoes and casual footwear composed of man-made materials or leather. In addition, the Company offers outdoor boots, shoes and sandals. As of December 31, 2016, the Company’s shoes were marketed throughout the United States and Canada in over 10,000 shoe, clothing and department stores. As of December 31, 2016, the retail segment consisted of 13 Company-operated stores and an Internet business in the United States.

About Skechers U.S.A.

Skechers U.S.A., Inc. is a designer and marketer of Skechers-branded lifestyle footwear for men, women and children, and performance footwear for men and women under the Skechers GO brand name. The Company operates through three segments: domestic wholesale sales, international wholesale sales, and retail sales, which includes e-commerce sales. Its lifestyle brands include Skechers USA, Skechers Sport, Skechers Active and Skechers Sport Active, Skechers Originals, BOBS from Skechers and Mark Nason. Its Performance Brands include Skechers Performance, Skechers Kids and Skechers Work. Its footwear is sold through a range of department stores and specialty retail stores and mid-tier retailers, boutiques, among others. As of February 1, 2017, the Company owned and operated 117 concept stores, 163 factory outlet stores and 134 warehouse outlet stores in the United States, and 101 concept stores, 51 factory outlet stores, and five warehouse outlet stores internationally.

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