Hanesbrands (NYSE:HBI) and V.F. (NYSE:VFC) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.
Earnings and Valuation
This table compares Hanesbrands and V.F.'s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Hanesbrands | $6.97 billion | 0.70 | $600.72 million | $1.76 | 8.01 |
| V.F. | $10.49 billion | 3.31 | $679.45 million | $2.68 | 33.26 |
V.F. has higher revenue and earnings than Hanesbrands. Hanesbrands is trading at a lower price-to-earnings ratio than V.F., indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent recommendations for Hanesbrands and V.F., as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Hanesbrands | 1 | 3 | 5 | 1 | 2.60 |
| V.F. | 1 | 8 | 12 | 0 | 2.52 |
Hanesbrands presently has a consensus target price of $13.75, suggesting a potential downside of 2.41%. V.F. has a consensus target price of $81.2632, suggesting a potential downside of 8.85%. Given Hanesbrands' stronger consensus rating and higher possible upside, equities analysts plainly believe Hanesbrands is more favorable than V.F..
Profitability
This table compares Hanesbrands and V.F.'s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Hanesbrands | 6.68% | 52.04% | 7.15% |
| V.F. | -0.52% | 16.44% | 4.78% |
Insider and Institutional Ownership
89.1% of Hanesbrands shares are owned by institutional investors. Comparatively, 69.4% of V.F. shares are owned by institutional investors. 0.8% of Hanesbrands shares are owned by insiders. Comparatively, 0.8% of V.F. shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Volatility and Risk
Hanesbrands has a beta of 1.62, meaning that its stock price is 62% more volatile than the S&P 500. Comparatively, V.F. has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500.
Dividends
Hanesbrands pays an annual dividend of $0.60 per share and has a dividend yield of 4.3%. V.F. pays an annual dividend of $1.92 per share and has a dividend yield of 2.2%. Hanesbrands pays out 34.1% of its earnings in the form of a dividend. V.F. pays out 71.6% 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. Hanesbrands has increased its dividend for 1 consecutive years and V.F. has increased its dividend for 48 consecutive years. Hanesbrands is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Hanesbrands beats V.F. on 11 of the 18 factors compared between the two stocks.
