Financial Analysis: Rocky Brands (NASDAQ:RCKY) versus V.F. (NYSE:VFC)

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

Volatility & Risk

V.F. has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500. Comparatively, Rocky Brands has a beta of 2.35, suggesting that its share price is 135% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for V.F. and Rocky Brands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
V.F.	2	12	4	2	2.30
Rocky Brands	0	3	1	0	2.25

V.F. presently has a consensus price target of $18.21, indicating a potential upside of 19.50%. Rocky Brands has a consensus price target of $56.00, indicating a potential upside of 10.96%. Given V.F.’s stronger consensus rating and higher possible upside, analysts clearly believe V.F. is more favorable than Rocky Brands.

Dividends

V.F. pays an annual dividend of $0.36 per share and has a dividend yield of 2.4%. Rocky Brands pays an annual dividend of $0.68 per share and has a dividend yield of 1.3%. V.F. pays out 52.2% of its earnings in the form of a dividend. Rocky Brands pays out 17.8% 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.

Insider and Institutional Ownership

86.8% of V.F. shares are owned by institutional investors. Comparatively, 75.1% of Rocky Brands shares are owned by institutional investors. 1.5% of V.F. shares are owned by company insiders. Comparatively, 7.6% of Rocky Brands shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares V.F. and Rocky Brands”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
V.F.	$9.51 billion	0.63	$254.92 million	$0.69	22.08
Rocky Brands	$481.98 million	0.79	$22.27 million	$3.82	13.21

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

Profitability

This table compares V.F. and Rocky Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
V.F.	2.88%	18.91%	3.26%
Rocky Brands	5.72%	12.44%	6.45%

Summary

V.F. beats Rocky Brands on 10 of the 17 factors compared between the two stocks.

About V.F.

VF Corp. engages in the business of producing and marketing apparel, footwear, and accessories. It operates through the following segments: Outdoor, Active, Work, and Other. The Outdoor segment includes authentic outdoor-based lifestyle brands such as performance-based and outdoor apparel, footwear, and equipment. The Active segment focuses on activity-based lifestyle brands including active apparel, footwear, backpacks, luggage, and accessories. The Work segment offers work and work-inspired lifestyle brands with product offerings including apparel, footwear, and accessories. The Other segment refers to the sale of non-VF products and sourcing activities related to transition services. The company was founded by John Barbey in October 1899 and is headquartered in Denver, CO.

About Rocky Brands

Rocky Brands, Inc. designs, manufactures, and markets footwear and apparel in the United States, Canada, and internationally. It operates through Wholesale, Retail, and Contract Manufacturing segments. The Wholesale segment offers products, which includes sporting goods stores, outdoor retailers, independent shoe retailers, hardware stores, catalogs, mass merchants, uniform stores, farm store chains, specialty safety stores, specialty retailers, and online retailers in retail locations through a range of distribution channels. Retail segment sells its products directly to consumers through its websites comprising rockyboots.com, georgiaboot.com, durangoboot.com, muckbootcompany.com, xtratuf.com, lehighoutfitters.com, lehighsafetyshoes.com, and slipgrips.com; and third-party marketplaces and Rocky Outdoor Gear Stores. The Contract Manufacturing segment include private label sales and any sales to customers which are contracted to manufacture a specific footwear product for a customer and include sales to the U.S. Military. In addition, it serves industrial and construction workers, as well as workers in the hospitality industry, such as restaurants or hotels; farmers and ranchers; western; commercial military personnel; hunting, fishing, camping, and hiking enthusiasts; law enforcement, security personnel, and postal employees; and for the U.S. military personnel. The company sells its products under the Rocky, Georgia Boot, Durango, Lehigh, Muck, XTRATUF, Servus, Ranger, and Michelin brand names Rocky Brands, Inc. was formerly known as William Brooks Shoe Co. The company was founded in 1932 and is headquartered in Nelsonville, Ohio.