Financial Survey: Ralph Lauren Corporation (RL) & Hanesbrands (HBI)
Ralph Lauren Corporation (NYSE: RL) 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 dividends, valuation, risk, earnings, profitability, institutional ownership and analyst recommendations.
This table compares Ralph Lauren Corporation and Hanesbrands’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ralph Lauren Corporation||-0.27%||13.80%||8.14%|
Valuation & Earnings
This table compares Ralph Lauren Corporation and Hanesbrands’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ralph Lauren Corporation||$6.45 billion||1.13||$987.10 million||($0.23)||-388.83|
|Hanesbrands||$6.36 billion||1.36||$1.05 billion||$1.52||15.64|
Hanesbrands has higher revenue, but lower earnings than Ralph Lauren Corporation. Ralph Lauren Corporation is trading at a lower price-to-earnings ratio than Hanesbrands, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Ralph Lauren Corporation has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, Hanesbrands has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.
This is a summary of current ratings for Ralph Lauren Corporation and Hanesbrands, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ralph Lauren Corporation||2||11||4||0||2.12|
Ralph Lauren Corporation presently has a consensus target price of $87.15, suggesting a potential downside of 2.55%. Hanesbrands has a consensus target price of $27.38, suggesting a potential upside of 15.21%. Given Hanesbrands’ stronger consensus rating and higher possible upside, analysts plainly believe Hanesbrands is more favorable than Ralph Lauren Corporation.
Ralph Lauren Corporation pays an annual dividend of $2.00 per share and has a dividend yield of 2.2%. Hanesbrands pays an annual dividend of $0.60 per share and has a dividend yield of 2.5%. Ralph Lauren Corporation pays out -869.6% of its earnings in the form of a dividend. Hanesbrands pays out 39.5% 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. Ralph Lauren Corporation has increased its dividend for 3 consecutive years and Hanesbrands has increased its dividend for 5 consecutive years. Hanesbrands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
62.9% of Ralph Lauren Corporation shares are owned by institutional investors. Comparatively, 94.3% of Hanesbrands shares are owned by institutional investors. 32.9% of Ralph Lauren Corporation shares are owned by company insiders. Comparatively, 1.1% of Hanesbrands shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Hanesbrands beats Ralph Lauren Corporation on 13 of the 17 factors compared between the two stocks.
Ralph Lauren Corporation Company Profile
Ralph Lauren Corporation is engaged in the design, marketing and distribution of lifestyle products, including apparel, accessories, home furnishings and other licensed product categories. The Company operates through three segments: Wholesale, Retail and Licensing. Wholesale business consists of sales made to department stores and specialty stores around the world. Retail business consists of sales made directly to consumers through retail channel, which includes Company’s’ retail stores, concession-based shop-within-shops and e-commerce operations around the world. Licensing business consists of royalty-based arrangements, under which the Company licenses to unrelated third parties for specified periods the right to operate retail stores and/or to use its various trademarks in connection with the manufacture and sale of designated products, such as certain apparel, eyewear, fragrances and home furnishings.
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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