Head-To-Head Contrast: Gildan Activewear (GIL) & Columbia Sportswear Company (COLM)

Columbia Sportswear Company (NASDAQ: COLM) and Gildan Activewear (NYSE:GIL) 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 dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitabiliy.

Profitability

This table compares Columbia Sportswear Company and Gildan Activewear’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Columbia Sportswear Company 8.19% 12.80% 10.15%
Gildan Activewear 13.81% 18.09% 12.20%

Risk & Volatility

Columbia Sportswear Company has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500. Comparatively, Gildan Activewear has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500.

Insider and Institutional Ownership

39.7% of Columbia Sportswear Company shares are owned by institutional investors. Comparatively, 72.1% of Gildan Activewear shares are owned by institutional investors. 58.9% of Columbia Sportswear Company shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Columbia Sportswear Company and Gildan Activewear, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Columbia Sportswear Company 0 8 7 0 2.47
Gildan Activewear 0 2 7 1 2.90

Columbia Sportswear Company currently has a consensus target price of $64.36, suggesting a potential upside of 13.82%. Gildan Activewear has a consensus target price of $35.63, suggesting a potential upside of 13.46%. Given Columbia Sportswear Company’s higher probable upside, equities analysts plainly believe Columbia Sportswear Company is more favorable than Gildan Activewear.

Valuation & Earnings

This table compares Columbia Sportswear Company and Gildan Activewear’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Columbia Sportswear Company $2.40 billion 1.64 $324.83 million $2.77 20.42
Gildan Activewear $2.66 billion 2.66 $547.33 million $1.57 20.00

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

Dividends

Columbia Sportswear Company pays an annual dividend of $0.72 per share and has a dividend yield of 1.3%. Gildan Activewear pays an annual dividend of $0.37 per share and has a dividend yield of 1.2%. Columbia Sportswear Company pays out 26.0% of its earnings in the form of a dividend. Gildan Activewear pays out 23.6% 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. Gildan Activewear has increased its dividend for 4 consecutive years.

Summary

Gildan Activewear beats Columbia Sportswear Company on 11 of the 17 factors compared between the two stocks.

Columbia Sportswear Company Company Profile

Columbia Sportswear Company is an apparel and footwear company. The Company designs, sources, markets and distributes outdoor lifestyle apparel, footwear, accessories and equipment under the Columbia, Mountain Hardwear, Sorel, prAna and other brands. Its geographic segments are the United States, Latin America and Asia Pacific (LAAP), Europe, Middle East and Africa (EMEA), and Canada. The Company develops and manages its merchandise in categories, including apparel, accessories and equipment, and footwear. It distributes its products through a mix of wholesale distribution channels, its own direct-to-consumer channels (retail stores and e-commerce), independent distributors and licensees. As of December 31, 2016, its products were sold in approximately 90 countries. In 59 of those countries, it sells to independent distributors to whom it has granted distribution rights. Contract manufacturers located outside the United States manufacture all of its products.

Gildan Activewear Company Profile

Gildan Activewear Inc. is a manufacturer and marketer of branded basic family apparel, including T-shirts, fleece, sport shirts, underwear, socks, hosiery and shapewear. The Company operates through two segments: Printwear and Branded Apparel. The Printwear segment designs, manufactures, sources, markets, and distributes undecorated activewear products. The Branded Apparel segment designs, manufactures, sources, markets, and distributes branded family apparel, which includes athletic, casual and dress socks, underwear, activewear, sheer hosiery, legwear, and shapewear products, which are sold to retailers in the United States and Canada. The Company sells its products under various brands, including the Gildan, Gold Toe, Anvil, Comfort Colors, American Apparel, Alstyle, Secret, Silks, Kushyfoot, Secret Silky, Therapy Plus, Peds, and MediPeds brands. The Company distributes its products in printwear markets in the United States, Canada, Mexico, Europe, Asia-Pacific and Latin America.

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