Columbia Sportswear (COLM) and Under Armour (UAA) Critical Contrast

Columbia Sportswear (NASDAQ: COLM) and Under Armour (NYSE:UAA) are both mid-cap consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, profitability, dividends and risk.

Profitability

This table compares Columbia Sportswear and Under Armour’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Columbia Sportswear 8.18% 12.45% 9.99%
Under Armour 2.94% 9.32% 5.00%

Dividends

Columbia Sportswear pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. Under Armour does not pay a dividend. Columbia Sportswear pays out 25.8% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Columbia Sportswear and Under Armour’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Columbia Sportswear $2.38 billion 1.82 $191.89 million $2.79 22.21
Under Armour $4,828.19 0.00 $256.97 $0.31 N/A

Columbia Sportswear has higher revenue and earnings than Under Armour. Under Armour is trading at a lower price-to-earnings ratio than Columbia Sportswear, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Columbia Sportswear has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, Under Armour has a beta of -0.15, suggesting that its share price is 115% less volatile than the S&P 500.

Insider & Institutional Ownership

38.9% of Columbia Sportswear shares are held by institutional investors. Comparatively, 30.4% of Under Armour shares are held by institutional investors. 58.9% of Columbia Sportswear shares are held by insiders. Comparatively, 16.4% of Under Armour shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Columbia Sportswear and Under Armour, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Columbia Sportswear 0 6 9 0 2.60
Under Armour 17 17 4 0 1.66

Columbia Sportswear currently has a consensus price target of $64.92, suggesting a potential upside of 4.78%. Under Armour has a consensus price target of $17.10, suggesting a potential upside of Infinity. Given Under Armour’s higher probable upside, analysts clearly believe Under Armour is more favorable than Columbia Sportswear.

Summary

Columbia Sportswear beats Under Armour on 12 of the 15 factors compared between the two stocks.

About Columbia Sportswear

Columbia Sportswear Company is an apparel and footwear company. The Company designs, sources, markets and distributes outdoor lifestyle apparel, footwear, accessories and equipment under the Columbia, Mountain Hardwear, Sorel, prAna and other brands. Its geographic segments are the United States, Latin America and Asia Pacific (LAAP), Europe, Middle East and Africa (EMEA), and Canada. The Company develops and manages its merchandise in categories, including apparel, accessories and equipment, and footwear. It distributes its products through a mix of wholesale distribution channels, its own direct-to-consumer channels (retail stores and e-commerce), independent distributors and licensees. As of December 31, 2016, its products were sold in approximately 90 countries. In 59 of those countries, it sells to independent distributors to whom it has granted distribution rights. Contract manufacturers located outside the United States manufacture all of its products.

About Under Armour

Under Armour, Inc. is engaged in the development, marketing and distribution of branded performance apparel, footwear and accessories for men, women and youth. The Company’s segments include North America, consisting of the United States and Canada; Europe, the Middle East and Africa (EMEA); Asia-Pacific; Latin America, and Connected Fitness. Its products are sold across the world and worn by athletes at all levels, from youth to professional, on playing fields around the globe, as well as by consumers with active lifestyles. The Company sells its branded apparel, footwear and accessories in North America through its wholesale and direct to consumer channels. As of December 31, 2016, the Company had approximately 151 factory house stores in North America primarily located in outlet centers throughout the United States. In addition, the Company distributes its products in North America through third-party logistics providers with primary locations in Canada, New Jersey and Florida.

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