Supergroup Plc, Cheltenham (OTCMKTS: SEPGY) and Hanesbrands (NYSE:HBI) are both mid-cap consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, risk, valuation, institutional ownership, profitability and dividends.

Analyst Recommendations

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This is a summary of recent ratings for Supergroup Plc, Cheltenham and Hanesbrands, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Supergroup Plc, Cheltenham 0 0 0 0 N/A
Hanesbrands 0 10 6 0 2.38

Hanesbrands has a consensus price target of $24.81, indicating a potential upside of 30.66%. Given Hanesbrands’ higher probable upside, analysts clearly believe Hanesbrands is more favorable than Supergroup Plc, Cheltenham.

Risk & Volatility

Supergroup Plc, Cheltenham has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Hanesbrands has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500.

Profitability

This table compares Supergroup Plc, Cheltenham and Hanesbrands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Supergroup Plc, Cheltenham N/A N/A N/A
Hanesbrands 0.96% 72.30% 10.04%

Valuation and Earnings

This table compares Supergroup Plc, Cheltenham and Hanesbrands’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Supergroup Plc, Cheltenham $973.16 million 2.11 $85.37 million N/A N/A
Hanesbrands $6.47 billion 1.06 $61.89 million $0.15 126.60

Supergroup Plc, Cheltenham has higher earnings, but lower revenue than Hanesbrands.

Institutional and Insider Ownership

99.9% of Hanesbrands shares are owned by institutional investors. 1.1% of Hanesbrands shares are owned by 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.

Dividends

Supergroup Plc, Cheltenham pays an annual dividend of $0.36 per share and has a dividend yield of 1.4%. Hanesbrands pays an annual dividend of $0.60 per share and has a dividend yield of 3.2%. Hanesbrands pays out 400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hanesbrands has raised its dividend for 4 consecutive years. Hanesbrands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Hanesbrands beats Supergroup Plc, Cheltenham on 10 of the 14 factors compared between the two stocks.

Supergroup Plc, Cheltenham Company Profile

SuperGroup Plc engages in the design, production, and sale of clothing and accessories primarily under the Superdry brand for men and women worldwide. It operates through two segments, Retail and Wholesale. The Retail segment operates stores, concessions, and various Internet sites, which sell company’s own brand and third party clothing, footwear, and accessories in the United Kingdom, the Republic of Ireland, Europe, and the United States. The Wholesale segment is involved in the ownership of brands; wholesale distribution of own brand products, such as clothing, footwear, and accessories; and trade sales. The company’s products include T-shirts, polo shirts, hoods and sweats, denim, joggers, tops, dresses, jackets, shirts, knitwear, footwear, bags, and accessories. It also engages in contracting overseas personnel. The company operates through 863 stores in 62 countries; and 27 international Websites across 18 countries covering 12 languages. SuperGroup Plc was founded in 1985 and is headquartered in Cheltenham, the United Kingdom.

Hanesbrands Company Profile

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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