V.F. Corporation (VFC) versus lululemon athletica inc. (LULU) Head to Head Survey

V.F. Corporation (NYSE: VFC) and lululemon athletica inc. (NASDAQ:LULU) are both mid-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.

Dividends

V.F. Corporation pays an annual dividend of $1.68 per share and has a dividend yield of 2.7%. lululemon athletica inc. does not pay a dividend. V.F. Corporation pays out 64.9% of its earnings in the form of a dividend. lululemon athletica inc. has raised its dividend for 44 consecutive years.

Analyst Ratings

This is a summary of recent ratings and target prices for V.F. Corporation and lululemon athletica inc., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
V.F. Corporation 1 15 5 0 2.19
lululemon athletica inc. 3 16 18 0 2.41

V.F. Corporation presently has a consensus price target of $60.61, indicating a potential downside of 2.49%. lululemon athletica inc. has a consensus price target of $65.71, indicating a potential upside of 9.96%. Given lululemon athletica inc.’s stronger consensus rating and higher possible upside, analysts clearly believe lululemon athletica inc. is more favorable than V.F. Corporation.

Volatility & Risk

V.F. Corporation has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500. Comparatively, lululemon athletica inc. has a beta of 0.22, indicating that its stock price is 78% less volatile than the S&P 500.

Earnings & Valuation

This table compares V.F. Corporation and lululemon athletica inc.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
V.F. Corporation $12.01 billion 2.04 $1.87 billion $2.59 24.00
lululemon athletica inc. $2.44 billion 3.08 $519.98 million $2.08 28.73

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

Insider and Institutional Ownership

88.6% of V.F. Corporation shares are held by institutional investors. Comparatively, 79.5% of lululemon athletica inc. shares are held by institutional investors. 1.6% of V.F. Corporation shares are held by company insiders. Comparatively, 0.3% of lululemon athletica inc. shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares V.F. Corporation and lululemon athletica inc.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
V.F. Corporation 9.23% 27.44% 12.68%
lululemon athletica inc. 11.68% 22.51% 18.58%

Summary

lululemon athletica inc. beats V.F. Corporation on 9 of the 17 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 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.

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