lululemon athletica inc. (NASDAQ: LULU) and Columbia Sportswear (NASDAQ:COLM) are both mid-cap consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and price targets for lululemon athletica inc. and Columbia Sportswear, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
lululemon athletica inc. 4 15 18 0 2.38
Columbia Sportswear 0 7 6 0 2.46

lululemon athletica inc. presently has a consensus price target of $65.03, suggesting a potential upside of 8.82%. Columbia Sportswear has a consensus price target of $63.45, suggesting a potential upside of 9.01%. Given Columbia Sportswear’s stronger consensus rating and higher probable upside, analysts plainly believe Columbia Sportswear is more favorable than lululemon athletica inc..

Dividends

Columbia Sportswear pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. lululemon athletica inc. does not pay a dividend. Columbia Sportswear pays out 26.5% of its earnings in the form of a dividend.

Institutional and Insider Ownership

80.2% of lululemon athletica inc. shares are owned by institutional investors. Comparatively, 39.2% of Columbia Sportswear shares are owned by institutional investors. 0.3% of lululemon athletica inc. shares are owned by company insiders. Comparatively, 58.9% of Columbia Sportswear shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares lululemon athletica inc. and Columbia Sportswear’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
lululemon athletica inc. 12.21% 23.43% 19.27%
Columbia Sportswear 8.01% 12.31% 9.84%

Earnings & Valuation

This table compares lululemon athletica inc. and Columbia Sportswear’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
lululemon athletica inc. $2.37 billion 3.45 $507.41 million N/A N/A
Columbia Sportswear $2.41 billion 1.68 $319.52 million $2.72 21.40

lululemon athletica inc. has higher revenue, but lower earnings than Columbia Sportswear.

Risk and Volatility

lululemon athletica inc. has a beta of 0.25, suggesting that its share price is 75% less volatile than the S&P 500. Comparatively, Columbia Sportswear has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500.

Summary

lululemon athletica inc. beats Columbia Sportswear on 9 of the 15 factors compared between the two stocks.

About lululemon athletica inc.

lululemon athletica inc. is a designer, distributor and retailer of athletic apparel. The Company operates through two segments: Company-operated stores and Direct to consumer. It is also engaged in the sale from outlets, showrooms, sales from temporary locations, sales to wholesale accounts, warehouse sales, and license and supply arrangements. Its direct to consumer segment generates revenue from its lululemon and ivivva e-commerce Websites, www.lululemon.com and www.ivivva.com, and other country and region specific Websites. It offers a range of apparel and accessories for women, men and female youth. The Company’s apparel assortment includes items, such as pants, shorts, tops, and jackets designed for healthy lifestyle and athletic activities, such as yoga, running, training, most other sweaty pursuits, and athletic wear for female youth. The Company also offers fitness-related accessories, including an array of items, such as bags, socks, underwear, yoga mats and water bottles.

About Columbia Sportswear

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.

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