adidas (ADDYY) and Its Peers Critical Review

adidas (OTCMKTS:ADDYYGet Rating) is one of 18 publicly-traded companies in the “Sporting & athletic goods, not elsewhere classified” industry, but how does it contrast to its peers? We will compare adidas to related companies based on the strength of its analyst recommendations, institutional ownership, dividends, valuation, earnings, profitability and risk.

Earnings & Valuation

This table compares adidas and its peers gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
adidas $25.12 billion $2.50 billion 12.28
adidas Competitors $3.70 billion $106.29 million 1.94

adidas has higher revenue and earnings than its peers. adidas is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares adidas and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
adidas 9.02% 16.49% 5.56%
adidas Competitors -6.30% 0.24% 1.77%

Dividends

adidas pays an annual dividend of $1.24 per share and has a dividend yield of 1.7%. adidas pays out 21.4% of its earnings in the form of a dividend. As a group, “Sporting & athletic goods, not elsewhere classified” companies pay a dividend yield of 1.9% and pay out 26.7% of their earnings in the form of a dividend.

Institutional and Insider Ownership

0.1% of adidas shares are owned by institutional investors. Comparatively, 68.2% of shares of all “Sporting & athletic goods, not elsewhere classified” companies are owned by institutional investors. 16.1% of shares of all “Sporting & athletic goods, not elsewhere classified” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

adidas has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500. Comparatively, adidas’ peers have a beta of 1.04, suggesting that their average stock price is 4% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for adidas and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
adidas 3 9 7 0 2.21
adidas Competitors 51 409 896 12 2.64

adidas currently has a consensus target price of $229.13, indicating a potential upside of 222.17%. As a group, “Sporting & athletic goods, not elsewhere classified” companies have a potential upside of 73.40%. Given adidas’ higher probable upside, analysts clearly believe adidas is more favorable than its peers.

Summary

adidas beats its peers on 8 of the 15 factors compared.

About adidas

(Get Rating)

adidas AG, together with its subsidiaries, designs, develops, distributes, and markets athletic and sports lifestyle products worldwide. It offers footwear; apparel; and accessories and gear, such as bags and balls under the adidas brand. It sells its products through approximately 2,200 own-retail stores; mono-branded franchise stores and shop-in-shops; and wholesale and its e-commerce channels. The company was formerly known as adidas-Salomon AG and changed its name to adidas AG in June 2006. adidas AG was founded in 1920 and is headquartered in Herzogenaurach, Germany.

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