Critical Review: Columbia Sportswear (COLM) vs. Iconix Brand Group (ICON)

Columbia Sportswear (NASDAQ: COLM) and Iconix Brand Group (NASDAQ:ICON) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, dividends, valuation, earnings, analyst recommendations and profitability.

Institutional and Insider Ownership

39.0% of Columbia Sportswear shares are held by institutional investors. Comparatively, 82.9% of Iconix Brand Group shares are held by institutional investors. 58.9% of Columbia Sportswear shares are held by company insiders. Comparatively, 1.3% of Iconix Brand Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Columbia Sportswear and Iconix Brand Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Columbia Sportswear $2.41 billion 1.70 $319.52 million $2.72 21.56
Iconix Brand Group $352.95 million 0.89 $156.87 million ($4.42) -1.25

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

Analyst Ratings

This is a summary of recent recommendations for Columbia Sportswear and Iconix Brand Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Columbia Sportswear 0 7 6 0 2.46
Iconix Brand Group 0 2 2 0 2.50

Columbia Sportswear presently has a consensus target price of $63.45, suggesting a potential upside of 8.21%. Iconix Brand Group has a consensus target price of $10.17, suggesting a potential upside of 83.85%. Given Iconix Brand Group’s stronger consensus rating and higher probable upside, analysts clearly believe Iconix Brand Group is more favorable than Columbia Sportswear.

Dividends

Columbia Sportswear pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. Iconix Brand Group does not pay a dividend. Columbia Sportswear pays out 26.5% of its earnings in the form of a dividend.

Profitability

This table compares Columbia Sportswear and Iconix Brand Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Columbia Sportswear 8.01% 12.31% 9.84%
Iconix Brand Group -82.22% 10.38% 3.02%

Risk & Volatility

Columbia Sportswear has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, Iconix Brand Group has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500.

Summary

Columbia Sportswear beats Iconix Brand Group on 11 of the 16 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 Iconix Brand Group

Iconix Brand Group, Inc. is a brand management company. As of December 31, 2016, the Company owned a portfolio of over 30 global consumer brands across women’s, men’s, and home categories. The Company operates through segments: men’s, women’s, home and international. The Company’s brand portfolio includes brands, such as Candie’s, Bongo, Joe Boxer, Rampage, Mudd, London Fog, Mossimo, Ocean Pacific/OP, Danskin/Danskin Now, Rocawear/Roc Nation, Cannon, Royal Velvet, Fieldcrest, Charisma, Starter, Waverly, Ecko Unltd/Mark Ecko Cut & Sew, Zoo York, Umbro, Lee Cooper and Artful Dodger, and interests in Material Girl, Ed Hardy, Truth or Dare, Modern Amusement, Buffalo, Nick Graham Hydraulic and PONY brands. It operates in various geographic regions, including the United States, Japan and Other (which principally represent Latin America and Europe).

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