Critical Analysis: Li Ning (OTCMKTS:LNNGY) versus Hennes & Mauritz (OTCMKTS:HNNMY)

Hennes & Mauritz (OTCMKTS:HNNMY) and Li Ning (OTCMKTS:LNNGY) are both retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, earnings, dividends, profitability, analyst recommendations, valuation and risk.

Volatility and Risk

Hennes & Mauritz has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500. Comparatively, Li Ning has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Hennes & Mauritz and Li Ning, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hennes & Mauritz	2	4	0	1	2.00
Li Ning	0	1	0	0	2.00

Profitability

This table compares Hennes & Mauritz and Li Ning’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hennes & Mauritz	5.46%	30.80%	7.35%
Li Ning	N/A	N/A	N/A

Valuation & Earnings

This table compares Hennes & Mauritz and Li Ning”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hennes & Mauritz	$23.01 billion	1.12	$1.23 billion	$0.16	22.75
Li Ning	$3.99 billion	1.68	$419.10 million	N/A	N/A

Hennes & Mauritz has higher revenue and earnings than Li Ning.

Institutional and Insider Ownership

0.0% of Hennes & Mauritz shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Hennes & Mauritz pays an annual dividend of $0.09 per share and has a dividend yield of 2.5%. Li Ning pays an annual dividend of $2.22 per share and has a dividend yield of 3.4%. Hennes & Mauritz pays out 56.3% of its earnings in the form of a dividend.

Summary

Hennes & Mauritz beats Li Ning on 8 of the 11 factors compared between the two stocks.

About Hennes & Mauritz

H & M Hennes & Mauritz AB (publ) provides clothing, accessories, footwear, cosmetics, home textiles, and homeware for women, men, and children worldwide. It offers sportswear, shoes, bags, beauty products, activewear, jeans, and ready-to-wear; and interior products, including bed linens, dinnerware, textiles, furniture, and lighting. The company provides its products under the H&M, H&M HOME, H&M Move, H&M Beauty, COS, Weekday, Monki, & Other Stories, ARKET, Afound, and Singular Society brand names. In addition, it operates Sellpy, a broad digital platform for second-hand fashion and other products; and Creator Studio, a global platform for merchandise design and production, as well as provides solutions to extend the useful life of unwanted garments through reuse and recycling under Looper Textile name. The company offers its products through online and physical stores. H & M Hennes & Mauritz AB (publ) was incorporated in 1943 and is headquartered in Stockholm, Sweden.

About Li Ning

Li Ning Company Limited, a sports brand company, engages in the research and development, design, manufacture, marketing, distribution, and retail of sporting goods in the People’s Republic of China. The company offers sporting goods, including professional and leisure footwear, apparel, equipment, and accessories under the LI-NING brand. It also develops, manufactures, markets, distributes, and/or sells outdoor sports products under the AIGLE brand; table tennis products under the Double Happiness brand name; fashionable fitness products for dance and yoga under the Danskin brand; and badminton products under the Kason brand name. The company also provides brand licensing, administrative, and property management services. It operates conventional stores, flagship stores, China LI-NING stores, LI-NING 1990 stores, factory outlets, and multi-brand stores under the LI-NING brand. The company was founded in 1990 and is headquartered in Beijing, the People’s Republic of China.