Critical Survey: Deckers Outdoor (NYSE:DECK) and Unifi (NYSE:UFI)

Unifi (NYSE:UFI) and Deckers Outdoor (NYSE:DECK) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, institutional ownership, valuation and dividends.

Insider & Institutional Ownership

67.7% of Unifi shares are held by institutional investors. Comparatively, 97.8% of Deckers Outdoor shares are held by institutional investors. 18.6% of Unifi shares are held by company insiders. Comparatively, 0.4% of Deckers Outdoor shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings for Unifi and Deckers Outdoor, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Unifi	1	0	0	0	1.00
Deckers Outdoor	3	13	9	0	2.24

Deckers Outdoor has a consensus price target of $114.80, suggesting a potential upside of 45.86%. Given Deckers Outdoor’s stronger consensus rating and higher possible upside, analysts clearly believe Deckers Outdoor is more favorable than Unifi.

Earnings and Valuation

This table compares Unifi and Deckers Outdoor”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Unifi	$531.30 million	0.24	-$24.56 million	($1.33)	-5.09
Deckers Outdoor	$5.47 billion	1.96	$1.02 billion	$7.05	11.16

Deckers Outdoor has higher revenue and earnings than Unifi. Unifi is trading at a lower price-to-earnings ratio than Deckers Outdoor, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Unifi and Deckers Outdoor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Unifi	-4.62%	-10.32%	-6.08%
Deckers Outdoor	18.54%	41.51%	26.55%

Risk and Volatility

Unifi has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500. Comparatively, Deckers Outdoor has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500.

Summary

Deckers Outdoor beats Unifi on 13 of the 14 factors compared between the two stocks.

About Unifi

Unifi, Inc., together with its subsidiaries, engages in the manufacture and sale of recycled and synthetic products in North America, Central America, South America, Asia, and Europe. Its polyester products include partially oriented yarn, textured, solution and package dyed, twisted, beamed, and draw wound yarns in virgin or recycled varieties; and nylon products comprise virgin or recycled textured, solution dyed, and spandex covered yarns. The company also provides recycled solutions made from pre-consumer and post-consumer waste, such as plastic bottle flakes, polyester polymer beads, and staple fiber. It offers recycled and synthetic products primarily to yarn manufacturers, knitters, and weavers that produces yarn and fabric for the apparel, hosiery, automotive, home furnishings, industrial, medical, and other end-use markets. The company sells its products through sales force and independent sales agents under the REPREVE brand. Unifi, Inc. was incorporated in 1969 and is headquartered in Greensboro, North Carolina.

About Deckers Outdoor

Deckers Outdoor Corporation, together with its subsidiaries, designs, markets, and distributes footwear, apparel, and accessories for casual lifestyle use and high-performance activities in the United States and internationally. The company offers premium footwear, apparel, and accessories under the UGG brand name; footwear, apparel, and accessories for ultra-runners and athletes under the HOKA brand name; and sandals, shoes, and boots under the Teva brand name. It also provides relaxed casual shoes and sandals under the Sanuk brand name; casual footwear fashion line under the Koolaburra brand name; and footwear under the AHNU brand name. The company sells its products through domestic and international retailers; international distributors; and directly to its consumers through its direct-to-consumer business, which includes e-commerce websites and retail stores. Deckers Outdoor Corporation was founded in 1973 and is headquartered in Goleta, California.