Analyzing Levi Strauss & Co. (NYSE:LEVI) & Weyco Group (NASDAQ:WEYS)

Weyco Group (NASDAQ:WEYS) and Levi Strauss & Co. (NYSE:LEVI) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for Weyco Group and Levi Strauss & Co., as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Weyco Group	0	0	1	0	3.00
Levi Strauss & Co.	0	3	12	0	2.80

Levi Strauss & Co. has a consensus target price of $27.43, indicating a potential upside of 41.02%. Given Levi Strauss & Co.’s higher probable upside, analysts clearly believe Levi Strauss & Co. is more favorable than Weyco Group.

Volatility and Risk

Weyco Group has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500. Comparatively, Levi Strauss & Co. has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500.

Earnings and Valuation

This table compares Weyco Group and Levi Strauss & Co.”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Weyco Group	$276.17 million	1.69	$23.08 million	$3.63	13.44
Levi Strauss & Co.	$6.61 billion	1.13	$578.10 million	$1.62	12.01

Levi Strauss & Co. has higher revenue and earnings than Weyco Group. Levi Strauss & Co. is trading at a lower price-to-earnings ratio than Weyco Group, indicating that it is currently the more affordable of the two stocks.

Dividends

Weyco Group pays an annual dividend of $1.12 per share and has a dividend yield of 2.3%. Levi Strauss & Co. pays an annual dividend of $0.64 per share and has a dividend yield of 3.3%. Weyco Group pays out 30.9% of its earnings in the form of a dividend. Levi Strauss & Co. 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. Weyco Group has raised its dividend for 3 consecutive years and Levi Strauss & Co. has raised its dividend for 4 consecutive years. Levi Strauss & Co. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Weyco Group and Levi Strauss & Co.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Weyco Group	12.39%	14.04%	11.28%
Levi Strauss & Co.	9.66%	25.79%	8.61%

Institutional and Insider Ownership

23.6% of Weyco Group shares are owned by institutional investors. Comparatively, 69.1% of Levi Strauss & Co. shares are owned by institutional investors. 36.4% of Weyco Group shares are owned by company insiders. Comparatively, 1.1% of Levi Strauss & Co. shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Levi Strauss & Co. beats Weyco Group on 9 of the 17 factors compared between the two stocks.

About Weyco Group

Weyco Group, Inc. designs and distributes footwear for men, women, and children. It operates in two segments, North American Wholesale Operations and North American Retail Operations. The company offers mid-priced leather dress shoes and casual footwear of man-made materials and leather; and outdoor boots, shoes, and sandals under the Florsheim, Nunn Bush, Stacy Adams, BOGS, Rafters, and Forsake brands. It is also involved in the wholesale of its products to footwear, department, and specialty stores, as well as e-commerce retailers in the United States and Canada. The company operates e-commerce business; and brick and mortar retail stores in the United States. In addition, it has licensing agreements with third parties, who sell its branded apparel, accessories, and specialty footwear. It operates in the United States, Canada, Australia, and South Africa. The company was formerly known as Weyenberg Shoe Manufacturing Company and changed its name to Weyco Group, Inc. in April 1990. Weyco Group, Inc. was incorporated in 1906 and is based in Milwaukee, Wisconsin.

About Levi Strauss & Co.

Levi Strauss & Co. engages in the design, marketing, and sale of apparel products. The company offers jeans, casual and dress pants, tops, shorts, skirts, jackets, footwear, and related accessories. It operates through the following geographical segments: Americas, Europe, and Asia. The company was founded by Levi Strauss in 1853 and is headquartered in San Francisco, CA.