Critical Review: Hanesbrands (NYSE:HBI) & Jerash Holdings (US) (NASDAQ:JRSH)

Jerash Holdings (US) (NASDAQ:JRSH) and Hanesbrands (NYSE:HBI) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, dividends and valuation.

Dividends

Jerash Holdings (US) pays an annual dividend of $0.20 per share and has a dividend yield of 6.1%. Hanesbrands pays an annual dividend of $0.60 per share and has a dividend yield of 8.7%. Jerash Holdings (US) pays out 285.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hanesbrands pays out 250.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hanesbrands is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Jerash Holdings (US) and Hanesbrands”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jerash Holdings (US)	$144.51 million	0.29	-$850,000.00	$0.07	46.71
Hanesbrands	$3.54 billion	0.69	-$320.43 million	$0.24	28.88

Jerash Holdings (US) has higher earnings, but lower revenue than Hanesbrands. Hanesbrands is trading at a lower price-to-earnings ratio than Jerash Holdings (US), indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Jerash Holdings (US) and Hanesbrands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jerash Holdings (US)	0	1	1	0	2.50
Hanesbrands	0	4	1	0	2.20

Jerash Holdings (US) currently has a consensus price target of $4.00, suggesting a potential upside of 22.32%. Hanesbrands has a consensus price target of $6.50, suggesting a potential downside of 6.20%. Given Jerash Holdings (US)’s stronger consensus rating and higher possible upside, research analysts plainly believe Jerash Holdings (US) is more favorable than Hanesbrands.

Profitability

This table compares Jerash Holdings (US) and Hanesbrands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jerash Holdings (US)	0.57%	1.31%	1.02%
Hanesbrands	2.49%	226.31%	5.19%

Risk and Volatility

Jerash Holdings (US) has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500. Comparatively, Hanesbrands has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500.

Insider and Institutional Ownership

3.4% of Jerash Holdings (US) shares are owned by institutional investors. Comparatively, 80.3% of Hanesbrands shares are owned by institutional investors. 42.7% of Jerash Holdings (US) shares are owned by company insiders. Comparatively, 0.5% of Hanesbrands shares are owned by company insiders. 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.

Summary

Hanesbrands beats Jerash Holdings (US) on 10 of the 15 factors compared between the two stocks.

About Jerash Holdings (US)

Jerash Holdings (US), Inc., through its subsidiaries, manufactures and exports customized and ready-made sport and outerwear. The company offers t-shirts; jackets and pullover; pants and shorts; crew neck, polo shirts, and tank tops made from knitted fabric, as well as personal protective equipment. It serves various brand-name retailers in the United States, Hong Kong, Jordan, and internationally. The company was incorporated in 2016 and is headquartered in Fairfield, New Jersey.

About Hanesbrands

Hanesbrands Inc., a consumer goods company, designs, manufactures, sources, and sells a range of range of innerwear apparels for men, women, and children in the Americas, Europe, the Asia pacific, and internationally. The company operates through three segments: Innerwear, Activewear, and International. It sells men’s underwear, women’s panties, children’s underwear, and socks, as well as intimate apparel comprising bras and shapewear; home goods; activewear apparel comprising T-shirts, fleece, performance apparel, sport shirts, performance T-shirts and shorts, sports bras, teamwear, and thermals; and licensed logo apparel in collegiate bookstores and mass retail channels. The company licenses its Champion name for footwear and sports accessories. It offers its products under the Hanes, Champion, Maidenform, JMS/Just My Size, Bali, Polo Ralph Lauren, Playtex, Alternative, Gear for Sports, Comfortwash, Hanes Beefy-T, Bonds, Sheridan, Bras N Things, Wonderbra, Berlei, Zorba, Sol y Oro, Maidenform, Rinbros, Bellinda, and RITMO brand names through retailers, wholesalers, and third-party embellishers. Hanesbrands Inc. was founded in 1901 and is headquartered in Winston-Salem, North Carolina.