Levi Strauss & Co. (NYSE:LEVI) versus Deckers Outdoor (NYSE:DECK) Critical Analysis

Levi Strauss & Co. (NYSE:LEVI) and Deckers Outdoor (NYSE:DECK) are both retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, profitability, risk and dividends.

Valuation and Earnings

This table compares Levi Strauss & Co. and Deckers Outdoor”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Levi Strauss & Co.	$6.36 billion	1.27	$210.60 million	$1.52	13.63
Deckers Outdoor	$5.24 billion	2.36	$966.09 million	$6.75	12.60

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

Analyst Ratings

This is a breakdown of current ratings and price targets for Levi Strauss & Co. and Deckers Outdoor, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Levi Strauss & Co.	0	4	10	0	2.71
Deckers Outdoor	2	11	10	2	2.48

Levi Strauss & Co. currently has a consensus price target of $26.42, suggesting a potential upside of 27.56%. Deckers Outdoor has a consensus price target of $117.58, suggesting a potential upside of 38.25%. Given Deckers Outdoor’s higher possible upside, analysts plainly believe Deckers Outdoor is more favorable than Levi Strauss & Co..

Insider and Institutional Ownership

69.1% of Levi Strauss & Co. shares are held by institutional investors. Comparatively, 97.8% of Deckers Outdoor shares are held by institutional investors. 1.3% of Levi Strauss & Co. shares are held by company insiders. Comparatively, 0.4% of Deckers Outdoor shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Levi Strauss & Co. and Deckers Outdoor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Levi Strauss & Co.	9.48%	27.92%	8.95%
Deckers Outdoor	19.47%	40.54%	26.95%

Volatility and Risk

Levi Strauss & Co. has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, Deckers Outdoor has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500.

Summary

Deckers Outdoor beats Levi Strauss & Co. on 9 of the 14 factors compared between the two stocks.

About Levi Strauss & Co.

Levi Strauss & Co. engages in the design, marketing, and sale of apparel products. The company offers jeans, casual and dress pants, tops, shorts, skirts, jackets, footwear, and related accessories. It operates through the following geographical segments: Americas, Europe, and Asia. The company was founded by Levi Strauss in 1853 and is headquartered in San Francisco, CA.

About Deckers Outdoor

Deckers Outdoor Corporation, together with its subsidiaries, designs, markets, and distributes footwear, apparel, and accessories for casual lifestyle use and high-performance activities in the United States and internationally. The company offers premium footwear, apparel, and accessories under the UGG brand name; footwear, apparel, and accessories for ultra-runners and athletes under the HOKA brand name; and sandals, shoes, and boots under the Teva brand name. It also provides relaxed casual shoes and sandals under the Sanuk brand name; casual footwear fashion line under the Koolaburra brand name; and footwear under the AHNU brand name. The company sells its products through domestic and international retailers; international distributors; and directly to its consumers through its direct-to-consumer business, which includes e-commerce websites and retail stores. Deckers Outdoor Corporation was founded in 1973 and is headquartered in Goleta, California.