Crocs (NASDAQ: CROX) and adidas (OTCMKTS:ADDYY) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, risk, profitability and valuation.

Dividends

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adidas pays an annual dividend of $0.80 per share and has a dividend yield of 0.7%. Crocs does not pay a dividend. adidas pays out 26.6% of its earnings in the form of a dividend.

Institutional & Insider Ownership

99.8% of Crocs shares are held by institutional investors. Comparatively, 0.1% of adidas shares are held by institutional investors. 1.4% of Crocs shares are held 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.

Profitability

This table compares Crocs and adidas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Crocs 1.00% 6.19% 2.36%
adidas 5.07% 22.29% 9.50%

Volatility and Risk

Crocs has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500. Comparatively, adidas has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Crocs and adidas, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Crocs 1 3 3 0 2.29
adidas 0 5 5 0 2.50

Crocs presently has a consensus price target of $10.17, indicating a potential downside of 34.41%. adidas has a consensus price target of $210.00, indicating a potential upside of 73.96%. Given adidas’ stronger consensus rating and higher possible upside, analysts plainly believe adidas is more favorable than Crocs.

Valuation & Earnings

This table compares Crocs and adidas’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Crocs $1.02 billion 1.04 $10.23 million ($0.16) -96.88
adidas $23.97 billion 2.03 $1.24 billion $3.01 40.11

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

Summary

adidas beats Crocs on 12 of the 15 factors compared between the two stocks.

Crocs Company Profile

Crocs, Inc. is engaged in the design, development, manufacturing, marketing, distribution and sale of casual lifestyle footwear and accessories for men, women, and children. The Company’s segments include Americas, Asia Pacific and Europe. Its products include footwear and accessories that utilize its closed-cell resin, called Croslite, as well as casual lifestyle footwear that use a range of materials. Its Croslite material enables the Company to produce non-marking, and odor-resistant footwear. As of December 31, 2016, the Company sold its products in over 90 countries through domestic and international retailers and distributors, and directly to consumers through its company-operated retail stores, outlets, e-commerce store sites and kiosks. The Company’s sales channels include wholesale, which includes distributors, Crocs owned retail and Crocs e-commerce.

adidas Company Profile

Adidas AG and its subsidiaries design, develop, produce and market a range of athletic and sports lifestyle products. The Company’s segments include Western Europe; North America; Greater China; Russia/CIS; Latin America; Japan; Middle East, South Korea, Southeast Asia/Pacific; TaylorMade-adidas Golf; Runtastic and Other centrally managed business. Each market includes wholesale, retail and e-commerce business activities relating to the distribution and sale of products of the adidas and Reebok brands to retail customers and end consumers. The Company has over 2,800 own-retail stores, over 12,000 mono-branded franchise stores, over 120,000 wholesale doors and over 50 e-commerce sites. adidas and Reebok branded products include footwear, apparel and hardware, such as bags and balls.

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