Critical Contrast: Unifi (NYSE:UFI) versus Adidas (OTCMKTS:ADDYY)

Adidas (OTCMKTS:ADDYY) and Unifi (NYSE:UFI) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, dividends, valuation and profitability.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Adidas and Unifi, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Adidas	1	3	9	0	2.62
Unifi	1	0	0	0	1.00

Adidas currently has a consensus target price of $146.02, suggesting a potential upside of 60.30%. Given Adidas’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Adidas is more favorable than Unifi.

Institutional & Insider Ownership

67.7% of Unifi shares are held by institutional investors. 18.6% of Unifi shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Adidas	$28.06 billion	1.16	$1.52 billion	$4.54	20.06
Unifi	$571.34 million	0.21	-$20.35 million	($0.45)	-14.37

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Adidas	5.30%	22.53%	6.87%
Unifi	-1.50%	-14.14%	-8.28%

Volatility and Risk

Adidas has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500. Comparatively, Unifi has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.

Summary

Adidas beats Unifi on 12 of the 14 factors compared between the two stocks.

About Adidas

adidas AG, together with its subsidiaries, designs, develops, produces, and markets athletic and sports lifestyle products in Europe, the Middle East, Africa, North America, Greater China, the Asia-Pacific, and Latin America. It offers footwear, apparel, and accessories and gear, such as bags and balls under the adidas brand; golf footwear and apparel under the adidas Golf brand; and outdoor footwear under the Five Ten brand. It sells its products through its own retail stores; mono-branded franchise stores and shop-in-shops; and wholesale and its e-commerce channels. 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.

About Unifi

Unifi, Inc., together with its subsidiaries, engages in the manufacture and sale of recycled and synthetic products in North America, Central America, South America, Asia, and Europe. Its polyester products include partially oriented yarn, textured, solution and package dyed, twisted, beamed, and draw wound yarns in virgin or recycled varieties; and nylon products comprise virgin or recycled textured, solution dyed, and spandex covered yarns. The company also provides recycled solutions made from pre-consumer and post-consumer waste, such as plastic bottle flakes, polyester polymer beads, and staple fiber. It offers recycled and synthetic products primarily to yarn manufacturers, knitters, and weavers that produces yarn and fabric for the apparel, hosiery, automotive, home furnishings, industrial, medical, and other end-use markets. The company sells its products through sales force and independent sales agents under the REPREVE brand. Unifi, Inc. was incorporated in 1969 and is headquartered in Greensboro, North Carolina.