Under Armour (NYSE: UAA) and Hanesbrands (NYSE:HBI) are both mid-cap consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, risk, earnings, profitability, valuation, dividends and institutional ownership.

Risk and Volatility

Under Armour has a beta of -0.07, suggesting that its stock price is 107% less volatile than the S&P 500. Comparatively, Hanesbrands has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.

Dividends

Hanesbrands pays an annual dividend of $0.60 per share and has a dividend yield of 2.4%. Under Armour does not pay a dividend. Hanesbrands pays out 39.5% of its earnings in the form of a dividend. Under Armour has increased its dividend for 3 consecutive years.

Analyst Ratings

This is a summary of current ratings and target prices for Under Armour and Hanesbrands, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Under Armour 10 21 6 0 1.89
Hanesbrands 0 4 7 0 2.64

Under Armour presently has a consensus price target of $23.54, indicating a potential upside of 39.05%. Hanesbrands has a consensus price target of $27.30, indicating a potential upside of 11.38%. Given Under Armour’s higher probable upside, equities analysts plainly believe Under Armour is more favorable than Hanesbrands.

Insider & Institutional Ownership

30.5% of Under Armour shares are owned by institutional investors. Comparatively, 94.3% of Hanesbrands shares are owned by institutional investors. 16.4% of Under Armour shares are owned by insiders. Comparatively, 1.1% of Hanesbrands shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Under Armour and Hanesbrands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Under Armour 4.38% 10.93% 5.91%
Hanesbrands 9.02% 64.80% 10.11%

Earnings & Valuation

This table compares Under Armour and Hanesbrands’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Under Armour $4.98 billion 1.50 $526.36 million $0.48 35.27
Hanesbrands $6.36 billion 1.40 $1.05 billion $1.52 16.13

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

Summary

Hanesbrands beats Under Armour on 11 of the 17 factors compared between the two stocks.

About Under Armour

Under Armour, Inc. is engaged in the development, marketing and distribution of branded performance apparel, footwear and accessories for men, women and youth. The Company’s segments include North America, consisting of the United States and Canada; Europe, the Middle East and Africa (EMEA); Asia-Pacific; Latin America, and Connected Fitness. Its products are sold across the world and worn by athletes at all levels, from youth to professional, on playing fields around the globe, as well as by consumers with active lifestyles. The Company sells its branded apparel, footwear and accessories in North America through its wholesale and direct to consumer channels. As of December 31, 2016, the Company had approximately 151 factory house stores in North America primarily located in outlet centers throughout the United States. In addition, the Company distributes its products in North America through third-party logistics providers with primary locations in Canada, New Jersey and Florida.

About Hanesbrands

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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