Critical Review: Lakeland Industries (NASDAQ:LAKE) versus Adidas (OTCMKTS:ADDYY)

Adidas (OTCMKTS:ADDYY) and Lakeland Industries (NASDAQ:LAKE) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Profitability

This table compares Adidas and Lakeland Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Adidas	5.30%	22.35%	6.80%
Lakeland Industries	-13.99%	-11.35%	-6.94%

Volatility and Risk

Adidas has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Lakeland Industries has a beta of 1.45, indicating that its share price is 45% more volatile than the S&P 500.

Insider and Institutional Ownership

71.7% of Lakeland Industries shares are owned by institutional investors. 3.4% of Lakeland Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Adidas and Lakeland Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Adidas	2	2	10	1	2.67
Lakeland Industries	2	0	3	0	2.20

Adidas currently has a consensus target price of $146.00, suggesting a potential upside of 64.03%. Lakeland Industries has a consensus target price of $15.00, suggesting a potential upside of 59.66%. Given Adidas’ stronger consensus rating and higher probable upside, analysts plainly believe Adidas is more favorable than Lakeland Industries.

Earnings and Valuation

This table compares Adidas and Lakeland Industries”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Adidas	$28.06 billion	1.13	$1.52 billion	$4.54	19.61
Lakeland Industries	$192.65 million	0.48	-$25.31 million	($2.71)	-3.47

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

Summary

Adidas beats Lakeland Industries on 12 of the 15 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 Lakeland Industries

Lakeland Industries, Inc. manufactures and sells industrial protective clothing and accessories for the industrial and public protective clothing market worldwide. It offers firefighting and heat protective apparel to protect against fire; high-end chemical protective suits to provide protection from highly concentrated, toxic and/or lethal chemicals, and biological toxins; and limited use/disposable protective clothing, such as coveralls, laboratory coats, shirts, pants, hoods, aprons, sleeves, arm guards, caps, and smocks. The company provides durable woven garments, including electrostatic dissipative apparel used in electronics clean rooms; flame resistant meta aramid, para aramid, and FR cotton coveralls/pants/jackets used in petrochemical, refining operations, and electrical utilities; FR fabrics; and cotton and polycotton coveralls, lab coats, pants, and shirts. In addition, it provides high visibility clothing comprising reflective apparel, including vests, T-shirts, sweatshirts, jackets, coats, raingear, jumpsuits, hats, and gloves; and gloves and sleeves that are used in the automotive, glass, and metal fabrication industries. The company sells its products to a network of safety and industrial supply distributors through in-house sales teams, customer service group, and independent sales representatives. It serves end users, such as integrated oil, chemical/petrochemical, automobile, steel, glass, construction, smelting, cleanroom, janitorial, pharmaceutical, and high technology electronics manufacturers, as well as scientific, medical laboratories, and the utilities industry; and federal, state, and local governmental agencies and departments. Lakeland Industries, Inc. was incorporated in 1982 and is headquartered in Huntsville, Alabama.