Perry Ellis International (NASDAQ: PERY) and Hanesbrands (NYSE:HBI) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, risk, earnings, analyst recommendations, institutional ownership and valuation.
Institutional & Insider Ownership
74.4% of Perry Ellis International shares are held by institutional investors. Comparatively, 99.9% of Hanesbrands shares are held by institutional investors. 22.2% of Perry Ellis International shares are held by company insiders. Comparatively, 1.1% of Hanesbrands shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Hanesbrands pays an annual dividend of $0.60 per share and has a dividend yield of 3.3%. Perry Ellis International does not pay a dividend. Hanesbrands pays out 400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hanesbrands has raised its dividend for 4 consecutive years.
This table compares Perry Ellis International and Hanesbrands’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Perry Ellis International||6.48%||9.55%||5.47%|
Valuation & Earnings
This table compares Perry Ellis International and Hanesbrands’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Perry Ellis International||$874.85 million||0.45||$56.65 million||$3.66||6.90|
|Hanesbrands||$6.47 billion||1.03||$61.89 million||$0.15||122.87|
Hanesbrands has higher revenue and earnings than Perry Ellis International. Perry Ellis International is trading at a lower price-to-earnings ratio than Hanesbrands, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and recommmendations for Perry Ellis International and Hanesbrands, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Perry Ellis International||0||2||4||0||2.67|
Perry Ellis International presently has a consensus target price of $30.00, indicating a potential upside of 18.76%. Hanesbrands has a consensus target price of $24.81, indicating a potential upside of 34.63%. Given Hanesbrands’ higher possible upside, analysts plainly believe Hanesbrands is more favorable than Perry Ellis International.
Volatility and Risk
Perry Ellis International has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500. Comparatively, Hanesbrands has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.
Hanesbrands beats Perry Ellis International on 12 of the 17 factors compared between the two stocks.
Perry Ellis International Company Profile
Perry Ellis International, Inc. designs, sources, markets, and licenses apparel products and accessories. The company operates through Men's Sportswear and Swim, Women's Sportswear, Direct-to-Consumer, and Licensing segments. It offers men's wear, such as career and casual sportswear, golf apparel, sports apparel, swimwear, activewear, and accessories; and women's wear, including dresses, sportswear, swimwear, activewear, and accessories. The company provides its products under various brands comprising Ben Hogan, Cubavera, Farah, Grand Slam, Jantzen, Laundry by Shelli Segal, Original Penguin by Munsingwear, Perry Ellis, Rafaella, and Savane. It also licenses the Callaway Golf, PGA TOUR, and Jack Nicklaus brands for golf apparel; the Jag brand for swimwear and cover-ups; and the Nike brand for swimwear and accessories, as well as Pro Player, John Henry, and Gotcha brands. The company distributes its products to wholesale customers that represent various levels of retail distribution, including luxury stores, department stores, national and regional chain stores, mass merchants, specialty stores, sporting goods stores, the corporate wear market, and e-commerce, as well as clubs and independent retailers. As of April 1, 2017, it operated 38 Perry Ellis, 14 Original Penguin, and 2 multi-brand retail outlet stores located primarily in upscale retail outlet malls in the United States, the United Kingdom, and Puerto Rico; and 2 Perry Ellis, 2 Cubavera, 12 Original Penguin, and 1 multi-brand full price retail stores located in upscale demographic markets in the United States and the United Kingdom. The company was formerly known as Supreme International Corporation and changed its name to Perry Ellis International, Inc. in 1999. Perry Ellis International, Inc. was founded in 1967 and is headquartered in Miami, Florida.
Hanesbrands Company Profile
Hanesbrands Inc. is a marketer of basic innerwear and activewear apparel in the Americas, Europe, Australia and Asia/Pacific under apparel brands, such as Hanes, Champion, Maidenform, DIM, Bali, Playtex, Bonds, JMS/Just My Size, Nur Die/Nur Der, L’eggs, Lovable, Wonderbra, Flexees, Gear for Sports and Berlei. The Company operates through four segments: Innerwear, Activewear, Direct to Consumer and International. The Innerwear segment focuses on core apparel products, such as intimate apparel, men’s underwear, women’s panties, children’s underwear, socks and hosiery. The Company operates in the activewear market through its Champion, Hanes and JMS/Just My Size brands. The Direct to Consumer segment operations include its domestic Company-operated outlet stores and Website operations that sell its branded products directly to consumers in the United States. The International segment includes products that primarily span across the innerwear and activewear segments.
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