Nike (NKE) and Deckers Outdoor (DECK) Financial Survey

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

Profitability

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

Net Margins Return on Equity Return on Assets
Nike 5.11% 33.38% 16.40%
Deckers Outdoor 4.17% 17.72% 12.43%

Analyst Ratings

This is a summary of recent ratings for Nike and Deckers Outdoor, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nike 2 14 22 0 2.53
Deckers Outdoor 1 8 5 0 2.29

Nike presently has a consensus price target of $68.35, suggesting a potential upside of 1.18%. Deckers Outdoor has a consensus price target of $86.23, suggesting a potential downside of 6.19%. Given Nike’s stronger consensus rating and higher possible upside, equities analysts clearly believe Nike is more favorable than Deckers Outdoor.

Volatility and Risk

Nike has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, Deckers Outdoor has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.

Valuation and Earnings

This table compares Nike and Deckers Outdoor’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nike $34.35 billion 3.20 $4.24 billion $2.51 26.91
Deckers Outdoor $1.79 billion 1.63 $5.71 million $3.82 24.06

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

Institutional and Insider Ownership

65.7% of Nike shares are owned by institutional investors. Comparatively, 99.6% of Deckers Outdoor shares are owned by institutional investors. 3.9% of Nike shares are owned by insiders. Comparatively, 1.9% of Deckers Outdoor shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Nike pays an annual dividend of $0.80 per share and has a dividend yield of 1.2%. Deckers Outdoor does not pay a dividend. Nike pays out 31.9% of its earnings in the form of a dividend.

Summary

Nike beats Deckers Outdoor on 12 of the 16 factors compared between the two stocks.

Nike Company Profile

NIKE, Inc., together with its subsidiaries, designs, develops, markets, and sells athletic footwear, apparel, equipment, and accessories worldwide. It offers NIKE brand products in nine categories: running, NIKE basketball, the Jordan brand, football, men's training, women's training, action sports, sportswear, and golf. The company also markets products designed for kids, as well as for other athletic and recreational uses, such as cricket, lacrosse, tennis, volleyball, wrestling, walking, and outdoor activities. In addition, it sells sports apparel; and markets apparel with licensed college and professional team and league logos. Further, the company sells a line of performance equipment, including bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment, and other equipment under the NIKE brand for sports activities; various plastic products to other manufacturers; athletic and casual footwear, apparel, and accessories under the Jumpman trademark; action sports and youth lifestyle apparel and accessories under the Hurley trademark; and casual sneakers, apparel, and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron, and Jack Purcell trademarks. Additionally, it licenses agreements that permit unaffiliated parties to manufacture and sell apparel, digital devices, and applications and other equipment for sports activities under NIKE-owned trademarks. The company sells its products to footwear stores, sporting goods stores, athletic specialty stores, department stores, skate, tennis and golf shops, and other retail accounts through NIKE-owned retail stores and Internet Websites, mobile applications, independent distributors, and licensees. The company was formerly known as Blue Ribbon Sports, Inc. and changed its name to NIKE, Inc. in 1971. NIKE, Inc. was founded in 1964 and is headquartered in Beaverton, Oregon.

Deckers Outdoor Company Profile

Deckers Outdoor Corporation, together with its subsidiaries, designs, markets, and distributes footwear, apparel, and accessories for casual lifestyle use and high performance activities. It offers premium footwear under the UGG brand name; sandals, shoes, and boots under the Teva brand name; and sidewalk surfers shoe, and yoga mat and beer cozy sandal collections under the Sanuk brand name. The company also provides running footwear under the Hoka brand name; and fashion casual footwear using sheepskin and other plush materials under the Koolaburra brand. It sells its products through department stores, domestic independent action sports retailers, outdoor retailers, specialty footwear retailers, and larger national retail chains, as well as online retailers such as Amazon and Zappos.com. The company also sells its products directly to end-user consumers through its retail stores and E-commerce Websites, as well as distributes its products through distributors and retailers in the United States, Europe, the Asia-Pacific, Canada, Australis, Latin America, and internationally. As of March 31, 2016, it had 160 retail stores, including 96 concept stores and 64 outlet stores worldwide. The company was founded in 1973 and is headquartered in Goleta, California.

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