Analyzing Gildan Activewear (GIL) and Lakeland Industries (NASDAQ:LAKE)

Gildan Activewear (NYSE: GIL) and Lakeland Industries (NASDAQ:LAKE) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Dividends

Gildan Activewear pays an annual dividend of $0.37 per share and has a dividend yield of 1.2%. Lakeland Industries does not pay a dividend. Gildan Activewear pays out 22.4% of its earnings in the form of a dividend. Lakeland Industries has raised its dividend for 4 consecutive years.

Risk and Volatility

Gildan Activewear has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500. Comparatively, Lakeland Industries has a beta of -0.12, indicating that its stock price is 112% less volatile than the S&P 500.

Institutional & Insider Ownership

77.2% of Gildan Activewear shares are owned by institutional investors. Comparatively, 44.0% of Lakeland Industries shares are owned by institutional investors. 8.6% of Lakeland Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Gildan Activewear and Lakeland Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gildan Activewear 14.16% 18.65% 12.68%
Lakeland Industries 6.31% 7.87% 6.54%

Earnings & Valuation

This table compares Gildan Activewear and Lakeland Industries’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gildan Activewear $2.68 billion 2.53 $567.29 million $1.65 18.26
Lakeland Industries $88.78 million 1.28 $10.64 million $0.77 20.39

Gildan Activewear has higher revenue and earnings than Lakeland Industries. Gildan Activewear is trading at a lower price-to-earnings ratio than Lakeland Industries, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Gildan Activewear and Lakeland Industries, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gildan Activewear 0 6 4 0 2.40
Lakeland Industries 0 0 0 0 N/A

Gildan Activewear currently has a consensus target price of $35.33, indicating a potential upside of 17.27%. Given Gildan Activewear’s higher possible upside, research analysts plainly believe Gildan Activewear is more favorable than Lakeland Industries.

Summary

Gildan Activewear beats Lakeland Industries on 12 of the 16 factors compared between the two stocks.

About Gildan Activewear

Gildan Activewear Inc. is a manufacturer and marketer of branded basic family apparel, including T-shirts, fleece, sport shirts, underwear, socks, hosiery and shapewear. The Company operates through two segments: Printwear and Branded Apparel. The Printwear segment designs, manufactures, sources, markets, and distributes undecorated activewear products. The Branded Apparel segment designs, manufactures, sources, markets, and distributes branded family apparel, which includes athletic, casual and dress socks, underwear, activewear, sheer hosiery, legwear, and shapewear products, which are sold to retailers in the United States and Canada. The Company sells its products under various brands, including the Gildan, Gold Toe, Anvil, Comfort Colors, American Apparel, Alstyle, Secret, Silks, Kushyfoot, Secret Silky, Therapy Plus, Peds, and MediPeds brands. The Company distributes its products in printwear markets in the United States, Canada, Mexico, Europe, Asia-Pacific and Latin America.

About Lakeland Industries

Lakeland Industries, Inc. (Lakeland) manufactures and sells a line of safety garments and accessories for the industrial and public protective clothing market. The Company’s product categories include limited use/disposable protective clothing; high-end chemical protective suits; firefighting, flame resistant personal protective equipment (FR PPE) and heat protective apparel; reusable woven garments; high visibility clothing, and glove and sleeves. The Company’s products are sold by its in-house customer service group, its regional sales managers and independent sales representatives to a network of over 1,200 North American safety and mill supply distributors. These distributors in turn supply end user industrial customers, such as integrated oil, chemical/petrochemical, utilities, automobile, steel, glass, construction, smelting, munition plants, janitorial, pharmaceutical, mortuaries and high technology electronics manufacturers, as well as scientific and medical laboratories.

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