Critical Comparison: Kontoor Brands (NYSE:KTB) & Birkenstock (NYSE:BIRK)

Birkenstock (NYSE:BIRK) and Kontoor Brands (NYSE:KTB) are both mid-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, risk, analyst recommendations and institutional ownership.

Earnings & Valuation

This table compares Birkenstock and Kontoor Brands”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Birkenstock	$2.32 billion	2.51	$385.46 million	$2.13	15.38
Kontoor Brands	$3.15 billion	1.27	$227.45 million	$4.79	15.27

Birkenstock has higher earnings, but lower revenue than Kontoor Brands. Kontoor Brands is trading at a lower price-to-earnings ratio than Birkenstock, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Birkenstock and Kontoor Brands, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Birkenstock	1	5	13	0	2.63
Kontoor Brands	1	4	7	0	2.50

Birkenstock currently has a consensus price target of $51.91, indicating a potential upside of 58.44%. Kontoor Brands has a consensus price target of $96.56, indicating a potential upside of 32.02%. Given Birkenstock’s stronger consensus rating and higher possible upside, research analysts plainly believe Birkenstock is more favorable than Kontoor Brands.

Volatility and Risk

Birkenstock has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500. Comparatively, Kontoor Brands has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500.

Profitability

This table compares Birkenstock and Kontoor Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Birkenstock	14.82%	13.36%	7.21%
Kontoor Brands	8.21%	59.71%	12.94%

Insider & Institutional Ownership

19.9% of Birkenstock shares are held by institutional investors. Comparatively, 93.1% of Kontoor Brands shares are held by institutional investors. 1.8% of Kontoor Brands shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Birkenstock beats Kontoor Brands on 8 of the 14 factors compared between the two stocks.

About Birkenstock

Birkenstock Holding plc manufactures and sells footwear products. It also offers sandals, shoes, closed-toe silhouettes, skincare products, and accessories. The company sells its products through e-commerce sites and a network of owned retail stores, as well as business-to-business channels. It operates in the United States, Brazil, Canada, Mexico, Europe, APMA, and internationally. Birkenstock Holding plc was founded in 1774 and is based in London, the United Kingdom. Birkenstock Holding plc is a subsidiary of BK LC Lux MidCo S.à r.l.

About Kontoor Brands

Kontoor Brands, Inc., a lifestyle apparel company, designs, produces, procures, markets, distributes, and licenses denim, apparel, footwear, and accessories, primarily under the Wrangler and Lee brands. The company operates through two segments: Wrangler and Lee. It licenses and sells apparel under the Rock & Republic brand name. The company sells its products primarily through mass merchants, specialty stores, mid-tier and traditional department stores, company-operated stores, and online. It operates in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific regions. Kontoor Brands, Inc. was incorporated in 2018 and is headquartered in Greensboro, North Carolina.