G-III Apparel Group (NASDAQ:GIII) and Adidas (OTCMKTS:ADDYY) Head-To-Head Review

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

Dividends

Adidas pays an annual dividend of $1.17 per share and has a dividend yield of 1.2%. G-III Apparel Group pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. Adidas pays out 21.7% of its earnings in the form of a dividend. G-III Apparel Group pays out 13.2% 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. G-III Apparel Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Adidas	6.08%	26.00%	7.92%
G-III Apparel Group	4.75%	5.53%	3.71%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Adidas	$28.06 billion	1.19	$1.52 billion	$5.38	17.42
G-III Apparel Group	$2.96 billion	0.44	$67.35 million	$3.04	9.96

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

Institutional & Insider Ownership

92.1% of G-III Apparel Group shares are owned by institutional investors. 15.0% of G-III Apparel Group 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

Adidas has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500. Comparatively, G-III Apparel Group has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Adidas and G-III Apparel Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Adidas	2	2	10	1	2.67
G-III Apparel Group	0	4	2	0	2.33

Adidas presently has a consensus target price of $146.00, indicating a potential upside of 55.77%. G-III Apparel Group has a consensus target price of $34.75, indicating a potential upside of 14.76%. Given Adidas’ stronger consensus rating and higher possible upside, equities analysts clearly believe Adidas is more favorable than G-III Apparel Group.

Summary

Adidas beats G-III Apparel Group on 12 of the 17 factors compared between the two stocks.

About Adidas

adidas AG, together with its subsidiaries, designs, develops, produces, and markets athletic and sports lifestyle products in Europe, the Middle East, Africa, North America, Greater China, the Asia-Pacific, and Latin America. It offers footwear, apparel, and accessories and gear, such as bags and balls under the adidas brand; golf footwear and apparel under the adidas Golf brand; and outdoor footwear under the Five Ten brand. It sells its products through its own retail stores; mono-branded franchise stores and shop-in-shops; and wholesale and its e-commerce channels. The company was formerly known as adidas-Salomon AG and changed its name to adidas AG in June 2006. adidas AG was founded in 1920 and is headquartered in Herzogenaurach, Germany.

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.