Contrasting PVH (NYSE:PVH) and Levi Strauss & Co. (NYSE:LEVI)

Levi Strauss & Co. (NYSE:LEVI) and PVH (NYSE:PVH) are both mid-cap consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, analyst recommendations, earnings and valuation.

Volatility and Risk

Levi Strauss & Co. has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, PVH has a beta of 1.72, suggesting that its share price is 72% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Levi Strauss & Co.	9.66%	25.79%	8.61%
PVH	-1.89%	11.94%	5.04%

Dividends

Levi Strauss & Co. pays an annual dividend of $0.64 per share and has a dividend yield of 3.0%. PVH pays an annual dividend of $0.15 per share and has a dividend yield of 0.2%. Levi Strauss & Co. pays out 39.5% of its earnings in the form of a dividend. PVH pays out -4.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Levi Strauss & Co. has increased its dividend for 4 consecutive years. Levi Strauss & Co. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Levi Strauss & Co. and PVH, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Levi Strauss & Co.	0	4	12	0	2.75
PVH	2	6	6	0	2.29

Levi Strauss & Co. presently has a consensus price target of $27.43, suggesting a potential upside of 30.30%. PVH has a consensus price target of $86.55, suggesting a potential upside of 16.80%. Given Levi Strauss & Co.’s stronger consensus rating and higher probable upside, equities analysts clearly believe Levi Strauss & Co. is more favorable than PVH.

Earnings and Valuation

This table compares Levi Strauss & Co. and PVH”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.	$6.61 billion	1.22	$578.10 million	$1.62	12.99
PVH	$8.92 billion	0.38	$25.30 million	($3.70)	-20.03

Levi Strauss & Co. has higher earnings, but lower revenue than PVH. PVH 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.

Insider & Institutional Ownership

69.1% of Levi Strauss & Co. shares are held by institutional investors. Comparatively, 97.3% of PVH shares are held by institutional investors. 1.1% of Levi Strauss & Co. shares are held by insiders. Comparatively, 1.5% of PVH shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Levi Strauss & Co. beats PVH on 12 of the 17 factors compared between the two stocks.

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 PVH

PVH Corp. operates as an apparel company in the United States and internationally. The company operates through Tommy Hilfiger North America, Tommy Hilfiger International, Calvin Klein North America, Calvin Klein International, and Heritage Brands Wholesale segments. It designs and markets men's, women's, and children's branded apparel, footwear and accessories, underwear, sleepwear, outerwear, home furnishings, luggage, dresses, suits and swimwear, activewear, sportswear, socks and accessories, outerwear, golf products, footwear, watches and jewelry, eyeglasses and non-ophthalmic sunglasses, jeans wear, performance apparel, intimate apparel, dress shirts, handbags, fragrance, small leather goods, and other related products; and men's and boy's tailored clothing products, duvets, pillows, mattress pads and toppers, and feather beds. The company offers its products under its own brands, such as TOMMY HILFIGER, TOMMY JEANS, Calvin Klein, CK Calvin Klein, Calvin Klein Jeans, Calvin Klein Underwear, and Calvin Klein Performance, as well as various other owned, licensed, and private label brands. It distributes its products at wholesale in department, chain, and specialty stores; through warehouse clubs, mass market, and off-price and independent retailers; and through company-operated full-price, outlet stores, and concession locations; and through digital commerce sites. PVH Corp. was founded in 1881 and is based in New York, New York.