lululemon athletica (NASDAQ:LULU) & Levi Strauss & Co. (NYSE:LEVI) Critical Contrast

Levi Strauss & Co. (NYSE:LEVI) and lululemon athletica (NASDAQ:LULU) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, dividends, valuation and risk.

Risk & Volatility

Levi Strauss & Co. has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, lululemon athletica has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Levi Strauss & Co. and lululemon athletica, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Levi Strauss & Co.	0	3	10	1	2.86
lululemon athletica	7	22	0	1	1.83

Levi Strauss & Co. currently has a consensus price target of $26.92, indicating a potential upside of 17.60%. lululemon athletica has a consensus price target of $105.26, indicating a potential downside of 4.99%. Given Levi Strauss & Co.’s stronger consensus rating and higher possible upside, equities analysts clearly believe Levi Strauss & Co. is more favorable than lululemon athletica.

Valuation and Earnings

This table compares Levi Strauss & Co. and lululemon athletica”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Levi Strauss & Co.	$6.28 billion	1.40	$578.10 million	$1.50	15.26
lululemon athletica	$11.10 billion	1.16	$1.58 billion	$12.21	9.07

lululemon athletica has higher revenue and earnings than Levi Strauss & Co.. lululemon athletica 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Levi Strauss & Co.	8.83%	27.40%	9.31%
lululemon athletica	12.78%	27.69%	15.81%

Institutional and Insider Ownership

69.1% of Levi Strauss & Co. shares are held by institutional investors. Comparatively, 85.2% of lululemon athletica shares are held by institutional investors. 1.1% of Levi Strauss & Co. shares are held by company insiders. Comparatively, 0.5% of lululemon athletica shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

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 lululemon athletica

Lululemon Athletica Inc., together with its subsidiaries, designs, distributes, and retails athletic apparel, footwear, and accessories under the lululemon brand for women and men. It offers pants, shorts, tops, and jackets for healthy lifestyle, such as yoga, running, training, and other activities. It also provides fitness-inspired accessories. The company sells its products through a chain of company-operated stores; outlets; interactive workout platform; yoga and fitness studios, university campus retailers, and other partners; license and supply arrangements; and temporary locations, as well as through mobile apps and lululemon.com e-commerce website. It has operations in the United States, Canada, Mainland China, Australia, South Korea, Hong Kong, Japan, New Zealand, Taiwan, Singapore, Malaysia, Macau, Thailand, the Asia Pacific, the United Kingdom, Germany, France, Ireland, Spain, the Netherlands, Sweden, Norway, Switzerland, Europe, the Middle East, and Africa. Lululemon Athletica Inc. was founded in 1998 and is based in Vancouver, Canada.