Head-To-Head Analysis: Kontoor Brands (NYSE:KTB) vs. Hanesbrands (NYSE:HBI)

Kontoor Brands (NYSE:KTB) and Hanesbrands (NYSE:HBI) are both mid-cap consumer cyclical companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, institutional ownership, valuation and dividends.

Insider and Institutional Ownership

93.1% of Kontoor Brands shares are owned by institutional investors. Comparatively, 80.3% of Hanesbrands shares are owned by institutional investors. 2.6% of Kontoor Brands shares are owned by insiders. Comparatively, 0.5% of Hanesbrands shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Kontoor Brands has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, Hanesbrands has a beta of 1.59, meaning that its share price is 59% more volatile than the S&P 500.

Valuation and Earnings

This table compares Kontoor Brands and Hanesbrands’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kontoor Brands	$2.56 billion	1.63	$230.99 million	$3.95	18.95
Hanesbrands	$5.49 billion	0.41	-$17.73 million	($0.06)	-105.83

Kontoor Brands has higher earnings, but lower revenue than Hanesbrands. Hanesbrands is trading at a lower price-to-earnings ratio than Kontoor Brands, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for Kontoor Brands and Hanesbrands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kontoor Brands	0	1	6	0	2.86
Hanesbrands	0	5	0	0	2.00

Kontoor Brands presently has a consensus price target of $78.83, suggesting a potential upside of 5.32%. Hanesbrands has a consensus price target of $5.80, suggesting a potential downside of 8.66%. Given Kontoor Brands’ stronger consensus rating and higher possible upside, research analysts clearly believe Kontoor Brands is more favorable than Hanesbrands.

Dividends

Kontoor Brands pays an annual dividend of $2.00 per share and has a dividend yield of 2.7%. Hanesbrands pays an annual dividend of $0.60 per share and has a dividend yield of 9.4%. Kontoor Brands pays out 50.6% of its earnings in the form of a dividend. Hanesbrands pays out -1,000.0% 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. Hanesbrands is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Kontoor Brands and Hanesbrands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kontoor Brands	9.35%	72.43%	16.31%
Hanesbrands	-0.42%	9.84%	0.58%

Summary

Kontoor Brands beats Hanesbrands on 12 of the 16 factors compared between the two stocks.

About Kontoor Brands

Kontoor Brands, Inc., a lifestyle apparel company, designs, produces, procures, markets, distributes, and licenses denim, apparel, footwear, and accessories, primarily under the Wrangler and Lee brands. The company operates through two segments: Wrangler and Lee. It licenses and sells apparel under the Rock & Republic brand name. The company sells its products primarily through mass merchants, specialty stores, mid-tier and traditional department stores, company-operated stores, and online. It operates in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific regions. Kontoor Brands, Inc. was incorporated in 2018 and is headquartered in Greensboro, North Carolina.

About Hanesbrands

Hanesbrands Inc., a consumer goods company, designs, manufactures, sources, and sells a range of range of innerwear apparels for men, women, and children in the Americas, Europe, the Asia pacific, and internationally. The company operates through three segments: Innerwear, Activewear, and International. It sells men’s underwear, women’s panties, children’s underwear, and socks, as well as intimate apparel comprising bras and shapewear; home goods; activewear apparel comprising T-shirts, fleece, performance apparel, sport shirts, performance T-shirts and shorts, sports bras, teamwear, and thermals; and licensed logo apparel in collegiate bookstores and mass retail channels. The company licenses its Champion name for footwear and sports accessories. It offers its products under the Hanes, Champion, Maidenform, JMS/Just My Size, Bali, Polo Ralph Lauren, Playtex, Alternative, Gear for Sports, Comfortwash, Hanes Beefy-T, Bonds, Sheridan, Bras N Things, Wonderbra, Berlei, Zorba, Sol y Oro, Maidenform, Rinbros, Bellinda, and RITMO brand names through retailers, wholesalers, and third-party embellishers. Hanesbrands Inc. was founded in 1901 and is headquartered in Winston-Salem, North Carolina.