Shaw Communications (NYSE:SJR) and Kontoor Brands (NYSE:KTB) are both consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, earnings, profitability and analyst recommendations.
Valuation and Earnings
This table compares Shaw Communications and Kontoor Brands' gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Shaw Communications | $3.79 billion | 3.74 | $513.04 million | $0.99 | 30.07 |
| Kontoor Brands | $2.55 billion | 1.47 | $96.65 million | $3.84 | 17.04 |
Shaw Communications has higher revenue and earnings than Kontoor Brands. Kontoor Brands is trading at a lower price-to-earnings ratio than Shaw Communications, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Shaw Communications has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500. Comparatively, Kontoor Brands has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.
Dividends
Shaw Communications pays an annual dividend of $0.67 per share and has a dividend yield of 2.3%. Kontoor Brands pays an annual dividend of $1.60 per share and has a dividend yield of 2.4%. Shaw Communications pays out 67.7% of its earnings in the form of a dividend. Kontoor Brands pays out 41.7% 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. Kontoor Brands has raised its dividend for 1 consecutive years. Kontoor Brands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Shaw Communications and Kontoor Brands' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Shaw Communications | 12.76% | 11.09% | 4.33% |
| Kontoor Brands | 2.56% | 1,685.31% | 8.07% |
Analyst Recommendations
This is a summary of recent recommendations for Shaw Communications and Kontoor Brands, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Shaw Communications | 0 | 4 | 4 | 0 | 2.50 |
| Kontoor Brands | 2 | 1 | 6 | 0 | 2.44 |
Shaw Communications presently has a consensus price target of $33.75, indicating a potential upside of 13.37%. Kontoor Brands has a consensus price target of $46.8571, indicating a potential downside of 28.39%. Given Shaw Communications' stronger consensus rating and higher possible upside, equities analysts clearly believe Shaw Communications is more favorable than Kontoor Brands.
Institutional & Insider Ownership
57.2% of Shaw Communications shares are held by institutional investors. Comparatively, 87.5% of Kontoor Brands shares are held by institutional investors. 1.0% of Shaw Communications shares are held by insiders. Comparatively, 1.9% of Kontoor Brands shares are held by 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
Kontoor Brands beats Shaw Communications on 11 of the 17 factors compared between the two stocks.
