Reviewing V.F. Corporation (VFC) and Duluth Holdings (DLTH)

V.F. Corporation (NYSE: VFC) and Duluth Holdings (NASDAQ:DLTH) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, risk, dividends, earnings and profitability.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for V.F. Corporation and Duluth Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
V.F. Corporation 1 15 5 0 2.19
Duluth Holdings 0 4 5 0 2.56

V.F. Corporation presently has a consensus target price of $65.72, indicating a potential downside of 6.00%. Duluth Holdings has a consensus target price of $27.15, indicating a potential upside of 54.08%. Given Duluth Holdings’ stronger consensus rating and higher probable upside, analysts plainly believe Duluth Holdings is more favorable than V.F. Corporation.

Institutional & Insider Ownership

34.1% of Duluth Holdings shares are held by institutional investors. 1.6% of V.F. Corporation shares are held by company insiders. Comparatively, 70.4% of Duluth Holdings shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

V.F. Corporation has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500. Comparatively, Duluth Holdings has a beta of 0.19, suggesting that its share price is 81% less volatile than the S&P 500.

Earnings and Valuation

This table compares V.F. Corporation and Duluth Holdings’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
V.F. Corporation $12.02 billion 2.30 $1.07 billion $2.37 29.50
Duluth Holdings $376.12 million 1.36 $21.31 million $0.58 30.38

V.F. Corporation has higher revenue and earnings than Duluth Holdings. V.F. Corporation is trading at a lower price-to-earnings ratio than Duluth Holdings, indicating that it is currently the more affordable of the two stocks.

Dividends

V.F. Corporation pays an annual dividend of $1.68 per share and has a dividend yield of 2.4%. Duluth Holdings does not pay a dividend. V.F. Corporation pays out 70.9% of its earnings in the form of a dividend. V.F. Corporation has raised its dividend for 44 consecutive years.

Profitability

This table compares V.F. Corporation and Duluth Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
V.F. Corporation 8.24% 29.22% 12.65%
Duluth Holdings 4.64% 17.05% 11.69%

Summary

V.F. Corporation beats Duluth Holdings on 10 of the 16 factors compared between the two stocks.

About V.F. Corporation

V.F. Corporation (VF) is engaged in the design, production, procurement, marketing and distribution of branded lifestyle apparel, footwear and related products. The Company’s segments include Outdoor & Action Sports, Jeanswear, Imagewear and Sportswear. Its Outdoor & Action Sports Coalition is a group of authentic outdoor and activity-based lifestyle brands. Its product offerings include apparel, footwear, equipment, backpacks, luggage and accessories. Its Imagewear coalition consists of the Image business. Its Wrangler brand offers denim, apparel, accessories and footwear through mass merchants, specialty stores and department stores in the United States, VF-operated stores and online at www.wrangler.com. The Sportswear coalition consists of the Nautica and Kipling brand businesses in North America (the Kipling brand outside of North America is managed by the Outdoor & Action Sports coalition).

About Duluth Holdings

Duluth Holdings Inc. is a lifestyle brand of men’s and women’s casual wear, workwear and accessories. The Company offers a line of functional products, such as its Longtail T shirts, Buck Naked underwear and Fire Hose work pants. The Company’s segments include direct and retail. The direct segment includes revenues from the Company’s Website and catalogs. The retail segment includes revenues from the Company’s retail and outlet stores. The Company offers its products under the Duluth Trading brand. The Company’s Website, www.duluthtrading.com, serves as a storefront for its product assortment. As of January 29, 2017, the Company operated 14 retail stores and two outlet stores. The Company’s stores range in size from approximately 6,000 to 14,000 selling square feet. The Company’s products also include Ballroom jeans, Duluthflex clothing, Armachillo shirts, Dry on the Fly pants, Armachillo underwear and No-Yank Tank.

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