Skechers U.S.A. (NYSE:SKX) vs. Adidas (OTCMKTS:ADDYY) Head to Head Analysis

Adidas (OTCMKTS:ADDYY) and Skechers U.S.A. (NYSE:SKX) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Valuation & Earnings

This table compares Adidas and Skechers U.S.A.”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Adidas	$25.63 billion	1.67	$826.72 million	$3.07	38.95
Skechers U.S.A.	$8.97 billion	1.05	$639.47 million	$4.16	15.16

Adidas has higher revenue and earnings than Skechers U.S.A.. Skechers U.S.A. is trading at a lower price-to-earnings ratio than Adidas, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Adidas and Skechers U.S.A., as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Adidas	0	3	3	3	3.00
Skechers U.S.A.	0	8	6	0	2.43

Skechers U.S.A. has a consensus target price of $67.69, indicating a potential upside of 7.33%. Given Skechers U.S.A.’s higher possible upside, analysts plainly believe Skechers U.S.A. is more favorable than Adidas.

Institutional & Insider Ownership

80.0% of Skechers U.S.A. shares are owned by institutional investors. 24.8% of Skechers U.S.A. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Adidas has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Skechers U.S.A. has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.

Profitability

This table compares Adidas and Skechers U.S.A.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Adidas	4.20%	17.85%	5.10%
Skechers U.S.A.	6.96%	13.34%	7.53%

Summary

Adidas beats Skechers U.S.A. on 8 of the 15 factors compared between the two stocks.

About Adidas

adidas AG, together with its subsidiaries, designs, develops, produces, and markets athletic and sports lifestyle products in Europe, the Middle East, Africa, North America, Greater China, the Asia-Pacific, and Latin America. It offers footwear, apparel, and accessories and gear, such as bags and balls under the adidas brand; golf footwear and apparel under the adidas Golf brand; and outdoor footwear under the Five Ten brand. It sells its products through its 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.

About Skechers U.S.A.

Skechers U.S.A., Inc. designs, develops, markets, and distributes footwear for men, women, and children worldwide. The company operates through Wholesale and Direct-to-Consumer segments. It offers footwear under Skechers Hands Free Slip-ins, Skechers Arch Fit, and Skechers Air-Cooled Memory Foam brands. In addition, the company provides men's and women's slip-resistant and safety-toe casuals, and boots for protective footwear in their work environments. It sells its products through department stores, family shoe stores, specialty running and sporting goods retailers, and big box club stores; franchisee and licensee third-party store operators; company-owned retail stores; digital commerce sites and mobile applications; and concept, factory outlet, and big box stores. The company licenses its Skechers brand. Skechers U.S.A., Inc. was incorporated in 1992 and is headquartered in Manhattan Beach, California.