GAP (NYSE:GAP) and Li Ning (OTCMKTS:LNNGY) Head to Head Review

GAP (NYSE:GAP) and Li Ning (OTCMKTS:LNNGY) are both mid-cap retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, analyst recommendations, profitability, institutional ownership and valuation.

Earnings & Valuation

This table compares GAP and Li Ning”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GAP	$15.37 billion	0.51	$816.00 million	$2.15	9.98
Li Ning	$4.12 billion	1.56	$408.36 million	N/A	N/A

GAP has higher revenue and earnings than Li Ning.

Analyst Recommendations

This is a breakdown of current ratings and target prices for GAP and Li Ning, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAP	0	4	11	2	2.88
Li Ning	0	0	0	2	4.00

GAP presently has a consensus target price of $30.62, indicating a potential upside of 42.75%. Given GAP’s higher possible upside, research analysts clearly believe GAP is more favorable than Li Ning.

Dividends

GAP pays an annual dividend of $0.70 per share and has a dividend yield of 3.3%. Li Ning pays an annual dividend of $1.76 per share and has a dividend yield of 2.8%. GAP pays out 32.6% of its earnings in the form of a dividend. GAP has increased its dividend for 1 consecutive years. GAP is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

GAP has a beta of 2.11, indicating that its share price is 111% more volatile than the S&P 500. Comparatively, Li Ning has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500.

Profitability

This table compares GAP and Li Ning’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GAP	5.31%	22.98%	6.70%
Li Ning	N/A	N/A	N/A

Insider & Institutional Ownership

58.8% of GAP shares are held by institutional investors. 31.0% of GAP shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

GAP beats Li Ning on 12 of the 15 factors compared between the two stocks.

About GAP

Gap, Inc. operates as a global apparel retail company, which offers clothing, apparel, accessories, and personal care products for men, women, and children. The firm operates through the following segments: Gap Global, Old Navy Global, Banana Republic Global, Athleta, and Other. The Gap Global segment includes apparel and accessories for men and women under the Gap brand, along with the GapKids, BabyGap, GapMaternity, GapBody, and GapFit collections. The Old Navy Global segment offers clothing and accessories for adults and children. The Banana Republic Global segment provides clothing, eyewear, jewelry, shoes, handbags, and fragrances. The Athleta segment offers fitness apparel for women. The company founded by Donald G. Fisher and Doris F. Fisher in July 1969 and is headquartered in San Francisco, CA.

About Li Ning

Li Ning Company Limited, a sports brand company, engages in the research and development, design, manufacture, marketing, distribution, and retail of sporting goods in the People’s Republic of China. The company offers sporting goods, including professional and leisure footwear, apparel, equipment, and accessories under the LI-NING brand. It also develops, manufactures, markets, distributes, and/or sells outdoor sports products under the AIGLE brand; table tennis products under the Double Happiness brand name; fashionable fitness products for dance and yoga under the Danskin brand; and badminton products under the Kason brand name. The company also provides brand licensing, administrative, and property management services. It operates conventional stores, flagship stores, China LI-NING stores, LI-NING 1990 stores, factory outlets, and multi-brand stores under the LI-NING brand. The company was founded in 1990 and is headquartered in Beijing, the People’s Republic of China.