Head to Head Analysis: Columbia Sportswear (NASDAQ:COLM) and Adidas (OTCMKTS:ADDYY)

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

Profitability

This table compares Columbia Sportswear and Adidas’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Columbia Sportswear	6.05%	11.20%	6.67%
Adidas	5.30%	22.35%	6.80%

Insider and Institutional Ownership

47.8% of Columbia Sportswear shares are held by institutional investors. 51.9% of Columbia Sportswear shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Columbia Sportswear and Adidas, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Columbia Sportswear	1	3	2	0	2.17
Adidas	1	3	9	0	2.62

Columbia Sportswear presently has a consensus price target of $65.40, suggesting a potential upside of 12.45%. Adidas has a consensus price target of $146.02, suggesting a potential upside of 66.23%. Given Adidas’ stronger consensus rating and higher possible upside, analysts plainly believe Adidas is more favorable than Columbia Sportswear.

Risk and Volatility

Columbia Sportswear has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500. Comparatively, Adidas has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500.

Valuation & Earnings

This table compares Columbia Sportswear and Adidas”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Columbia Sportswear	$3.40 billion	0.88	$177.22 million	$3.85	15.11
Adidas	$28.06 billion	1.12	$1.52 billion	$4.54	19.35

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

Dividends

Columbia Sportswear pays an annual dividend of $1.20 per share and has a dividend yield of 2.1%. Adidas pays an annual dividend of $1.17 per share and has a dividend yield of 1.3%. Columbia Sportswear pays out 31.2% of its earnings in the form of a dividend. Adidas pays out 25.8% 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.

Summary

Adidas beats Columbia Sportswear on 12 of the 16 factors compared between the two stocks.

About Columbia Sportswear

Columbia Sportswear Company, together with its subsidiaries, designs, develops, markets, and distributes outdoor, active, and everyday lifestyle apparel, footwear, accessories, and equipment in the United States, Latin America, the Asia Pacific, Europe, the Middle East, Africa, and Canada. The company provides apparel, accessories, and equipment for hiking, trail running, snow, fishing, hunting, mountaineering, climbing, skiing and snowboarding, trail, and outdoor activities. It offers footwear products that include lightweight hiking boot; trail running shoes; rugged cold weather boots; sandals and shoes for use in water activities; and footwear for lifestyle wear. In addition, it owned network of branded and outlet retail stores; brand-specific e-commerce sites; and concession or franchise-based arrangements with third parties at branded outlet and shop-in-shop retail locations, as well as through independently operated specialty outdoor and sporting goods stores, sporting goods chains, department store chains, internet retailers, and international distributors. The company sells its products under the Columbia, Mountain Hard Wear, SOREL, and prAna brand names. Columbia Sportswear Company was founded in 1938 and is headquartered in Portland, Oregon.

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.