Escalade (ESCA) vs. Adidas (OTCMKTS:ADDYY) Critical Comparison

Adidas (OTCMKTS: ADDYY) and Escalade (NASDAQ:ESCA) 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.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Adidas 0 5 4 0 2.44
Escalade 0 0 1 0 3.00

Adidas currently has a consensus target price of $210.00, suggesting a potential upside of 69.79%. Escalade has a consensus target price of $16.00, suggesting a potential upside of 20.21%. Given Adidas’ higher probable upside, analysts plainly believe Adidas is more favorable than Escalade.

Profitability

This table compares Adidas and Escalade’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Adidas 5.07% 22.20% 9.55%
Escalade 7.93% 10.06% 7.08%

Volatility and Risk

Adidas has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, Escalade has a beta of 0.03, meaning that its stock price is 97% less volatile than the S&P 500.

Institutional & Insider Ownership

0.1% of Adidas shares are owned by institutional investors. Comparatively, 26.8% of Escalade shares are owned by institutional investors. 20.1% of Escalade shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Adidas and Escalade’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Adidas $23.97 billion 2.08 $1.24 billion $3.96 31.23
Escalade $177.33 million 1.08 $14.06 million $0.77 17.29

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

Dividends

Adidas pays an annual dividend of $0.80 per share and has a dividend yield of 0.6%. Escalade pays an annual dividend of $0.50 per share and has a dividend yield of 3.8%. Adidas pays out 20.2% of its earnings in the form of a dividend. Escalade pays out 64.9% 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.

Summary

Adidas beats Escalade on 11 of the 16 factors compared between the two stocks.

Adidas Company Profile

adidas AG, together with its subsidiaries, designs, develops, produces, and markets athletic and sports lifestyle products worldwide. It offers footwear; apparel; and hardware, such as bags and balls under the adidas, Reebok, and adidas Golf brands. The company is also involved in Y-3 label business activities; and the operation of Runtastic, a digital health and fitness space. adidas AG sells its products through approximately 2,500 own-retail stores; 13,000 mono-branded franchise stores; and 150,000 wholesale doors, as well as its e-commerce Website. 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.

Escalade Company Profile

Escalade, Incorporated, together with its subsidiaries, manufactures and sells sporting goods in North America, Europe, and internationally. The company manufactures, imports, and distributes various sporting goods brands in basketball goals, archery, indoor and outdoor game recreation, and fitness products. It offers archery products under the Bear Archery, Trophy Ridge, Whisker Biscuit, Cajun Bowfishing, Karnage, Fletcher, and Rocket brand names; table tennis products under the STIGA and Ping-Pong brands; basketball goals under the Goalrilla, Goaliath, Silverback, Hoopstar, and Goalsetter brand names; and trampoline under the Vuly brand. The company also provides play systems under the Woodplay and Childlife brands; fitness products under the USWeight, The STEP, Lifeline, Kettleworx, Natural Fitness, and PER4M brand names; hockey and soccer game tables under the Atomic, American Legend, Redline, and Triumph brands; and billiard accessories under the Mizerak, Minnesota Fats, Lucasi, PureX, Rage, and Players brand names. In addition, it offers darting products under the Unicorn, Accudart, Arachnid, Nodor, and Winmau brands; and outdoor game products under the Zume Games, Pickleball Now, Onix, Viva Sol, and Triumph Sports brand names. The company provides its products through sporting goods retailers, specialty dealers, online retailers, traditional department stores, and mass merchants. Escalade, Incorporated was founded in 1922 and is headquartered in Evansville, Indiana.

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