Analyzing G-III Apparel Group (NASDAQ:GIII) & Kontoor Brands (NYSE:KTB)

G-III Apparel Group (NASDAQ:GIII) and Kontoor Brands (NYSE:KTB) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Analyst Ratings

This is a breakdown of current ratings for G-III Apparel Group and Kontoor Brands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
G-III Apparel Group	2	3	2	0	2.00
Kontoor Brands	1	3	5	2	2.73

G-III Apparel Group presently has a consensus price target of $29.00, suggesting a potential downside of 4.89%. Kontoor Brands has a consensus price target of $91.00, suggesting a potential upside of 17.69%. Given Kontoor Brands’ stronger consensus rating and higher probable upside, analysts clearly believe Kontoor Brands is more favorable than G-III Apparel Group.

Earnings and Valuation

This table compares G-III Apparel Group and Kontoor Brands”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
G-III Apparel Group	$2.96 billion	0.44	$67.35 million	$1.50	20.33
Kontoor Brands	$3.15 billion	1.36	$227.45 million	$4.05	19.09

Kontoor Brands has higher revenue and earnings than G-III Apparel Group. Kontoor Brands is trading at a lower price-to-earnings ratio than G-III Apparel Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares G-III Apparel Group and Kontoor Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
G-III Apparel Group	2.28%	6.70%	4.44%
Kontoor Brands	7.22%	62.02%	12.73%

Volatility and Risk

G-III Apparel Group has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500. Comparatively, Kontoor Brands has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.

Dividends

G-III Apparel Group pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. Kontoor Brands pays an annual dividend of $2.12 per share and has a dividend yield of 2.7%. G-III Apparel Group pays out 26.7% of its earnings in the form of a dividend. Kontoor Brands pays out 52.3% 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 raised 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.

Institutional & Insider Ownership

92.1% of G-III Apparel Group shares are held by institutional investors. Comparatively, 93.1% of Kontoor Brands shares are held by institutional investors. 13.0% of G-III Apparel Group shares are held by insiders. Comparatively, 1.8% of Kontoor Brands shares are held 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.

Summary

Kontoor Brands beats G-III Apparel Group on 14 of the 18 factors compared between the two stocks.

About G-III Apparel Group

G-III Apparel Group, Ltd. designs, sources, and markets women's and men's apparel in the United States and internationally. The company operates through two segments, Wholesale Operations and Retail Operations. Its products include outerwear, dresses, sportswear, swimwear, women's suits, and women's performance wear; and women's handbags, footwear, small leather goods, cold weather accessories, and luggage. The company markets apparel and other products under the proprietary brands, including DKNY, Donna Karan, Karl Lagerfeld, Karl Lagerfeld Paris, Vilebrequin, G.H. Bass, Eliza J, Jessica Howard, Andrew Marc, Marc New York, Wilsons Leather, Sonia Rykiel, and G-III Sports by Carl Banks; and licensed brands, such as Calvin Klein, Tommy Hilfiger, Levi's, Guess?, Kenneth Cole, Cole Haan, Vince Camuto, Margaritaville, and Dockers. It has licenses with the National Football League, National Basketball Association, Major League Baseball, and National Hockey League, as well as approximately 150 U.S. colleges and universities. The company offers its products to department, specialty, and mass merchant retail stores. It also sells its products online. G-III Apparel Group, Ltd. was founded in 1956 and is based in New York, New York.

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.