Contrasting V.F. Corporation (VFC) and PVH Corp. (PVH)

V.F. Corporation (NYSE: VFC) and PVH Corp. (NYSE:PVH) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Volatility & Risk

V.F. Corporation has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500. Comparatively, PVH Corp. has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500.

Dividends

V.F. Corporation pays an annual dividend of $1.68 per share and has a dividend yield of 2.4%. PVH Corp. pays an annual dividend of $0.15 per share and has a dividend yield of 0.1%. V.F. Corporation pays out 70.9% of its earnings in the form of a dividend. PVH Corp. pays out 2.9% 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. V.F. Corporation has increased its dividend for 44 consecutive years. V.F. Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares V.F. Corporation and PVH Corp.’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
V.F. Corporation $12.01 billion 2.28 $1.87 billion $2.37 29.39
PVH Corp. $8.41 billion 1.17 $1.14 billion $5.23 24.25

V.F. Corporation has higher revenue and earnings than PVH Corp.. PVH Corp. is trading at a lower price-to-earnings ratio than V.F. Corporation, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

95.7% of PVH Corp. shares are owned by institutional investors. 1.6% of V.F. Corporation shares are owned by company insiders. Comparatively, 1.3% of PVH Corp. 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.

Profitability

This table compares V.F. Corporation and PVH Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
V.F. Corporation 8.24% 29.22% 12.65%
PVH Corp. 4.96% 11.67% 5.13%

Analyst Recommendations

This is a summary of current recommendations for V.F. Corporation and PVH Corp., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
V.F. Corporation 1 15 5 0 2.19
PVH Corp. 0 4 12 0 2.75

V.F. Corporation currently has a consensus price target of $65.72, suggesting a potential downside of 5.64%. PVH Corp. has a consensus price target of $138.33, suggesting a potential upside of 9.09%. Given PVH Corp.’s stronger consensus rating and higher probable upside, analysts plainly believe PVH Corp. is more favorable than V.F. Corporation.

Summary

V.F. Corporation beats PVH Corp. on 11 of the 17 factors compared between the two stocks.

About V.F. Corporation

V.F. Corporation (VF) is engaged in the design, production, procurement, marketing and distribution of branded lifestyle apparel, footwear and related products. The Company’s segments include Outdoor & Action Sports, Jeanswear, Imagewear and Sportswear. Its Outdoor & Action Sports Coalition is a group of authentic outdoor and activity-based lifestyle brands. Its product offerings include apparel, footwear, equipment, backpacks, luggage and accessories. Its Imagewear coalition consists of the Image business. Its Wrangler brand offers denim, apparel, accessories and footwear through mass merchants, specialty stores and department stores in the United States, VF-operated stores and online at www.wrangler.com. The Sportswear coalition consists of the Nautica and Kipling brand businesses in North America (the Kipling brand outside of North America is managed by the Outdoor & Action Sports coalition).

About PVH Corp.

PVH Corp. is an apparel company. The Company operates through three segments: Calvin Klein, which consists of the Calvin Klein North America and Calvin Klein International segments; Tommy Hilfiger, which consists of the Tommy Hilfiger North America and Tommy Hilfiger International segments, and Heritage Brands, which consists of the Heritage Brands Wholesale and Heritage Brands Retail segments. The Company’s brand portfolio consists of various brand names, including Calvin Klein, Tommy Hilfiger, Van Heusen, IZOD, ARROW, Warner’s, Olga and Eagle, which are owned, and Speedo, Geoffrey Beene, Kenneth Cole New York, Kenneth Cole Reaction, Sean John, MICHAEL Michael Kors, Michael Kors Collection and Chaps, which are licensed, as well as various other licensed and private label brands. The Company designs and markets dress shirts, neckwear, sportswear, jeanswear, intimate apparel, swim products and handbags, footwear and other related products.

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