Critical Comparison: Columbia Sportswear (NASDAQ:COLM) & Kontoor Brands (NYSE:KTB)

Columbia Sportswear (NASDAQ:COLM) and Kontoor Brands (NYSE:KTB) are both mid-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.

Valuation and Earnings

This table compares Columbia Sportswear and Kontoor Brands”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Columbia Sportswear	$3.37 billion	0.91	$223.27 million	$3.92	14.21
Kontoor Brands	$2.61 billion	1.65	$245.80 million	$4.48	17.24

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

Profitability

This table compares Columbia Sportswear and Kontoor Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Columbia Sportswear	6.59%	12.97%	7.93%
Kontoor Brands	9.48%	68.76%	15.02%

Dividends

Columbia Sportswear pays an annual dividend of $1.20 per share and has a dividend yield of 2.2%. Kontoor Brands pays an annual dividend of $2.08 per share and has a dividend yield of 2.7%. Columbia Sportswear pays out 30.6% of its earnings in the form of a dividend. Kontoor Brands pays out 46.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Kontoor Brands has increased its dividend for 1 consecutive years. Kontoor Brands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

47.8% of Columbia Sportswear shares are owned by institutional investors. Comparatively, 93.1% of Kontoor Brands shares are owned by institutional investors. 48.3% of Columbia Sportswear shares are owned by insiders. Comparatively, 1.7% of Kontoor Brands shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Columbia Sportswear has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, Kontoor Brands has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Columbia Sportswear and Kontoor Brands, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Columbia Sportswear	1	5	1	0	2.00
Kontoor Brands	0	1	5	0	2.83

Columbia Sportswear currently has a consensus target price of $60.80, suggesting a potential upside of 9.12%. Kontoor Brands has a consensus target price of $89.67, suggesting a potential upside of 16.13%. Given Kontoor Brands’ stronger consensus rating and higher possible upside, analysts clearly believe Kontoor Brands is more favorable than Columbia Sportswear.

Summary

Kontoor Brands beats Columbia Sportswear on 14 of the 17 factors compared between the two stocks.

About Columbia Sportswear

Columbia Sportswear Company, together with its subsidiaries, designs, develops, markets, and distributes outdoor, active, and everyday lifestyle apparel, footwear, accessories, and equipment in the United States, Latin America, the Asia Pacific, Europe, the Middle East, Africa, and Canada. The company provides apparel, accessories, and equipment for hiking, trail running, snow, fishing, hunting, mountaineering, climbing, skiing and snowboarding, trail, and outdoor activities. It offers footwear products that include lightweight hiking boot; trail running shoes; rugged cold weather boots; sandals and shoes for use in water activities; and footwear for lifestyle wear. In addition, it owned network of branded and outlet retail stores; brand-specific e-commerce sites; and concession or franchise-based arrangements with third parties at branded outlet and shop-in-shop retail locations, as well as through independently operated specialty outdoor and sporting goods stores, sporting goods chains, department store chains, internet retailers, and international distributors. The company sells its products under the Columbia, Mountain Hard Wear, SOREL, and prAna brand names. Columbia Sportswear Company was founded in 1938 and is headquartered in Portland, Oregon.

About Kontoor Brands

Kontoor Brands, Inc., a lifestyle apparel company, designs, produces, procures, markets, distributes, and licenses denim, apparel, footwear, and accessories, primarily under the Wrangler and Lee brands. The company operates through two segments: Wrangler and Lee. It licenses and sells apparel under the Rock & Republic brand name. The company sells its products primarily through mass merchants, specialty stores, mid-tier and traditional department stores, company-operated stores, and online. It operates in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific regions. Kontoor Brands, Inc. was incorporated in 2018 and is headquartered in Greensboro, North Carolina.