Critical Analysis: Wacoal (OTCMKTS:WACLY) vs. Columbia Sportswear (NASDAQ:COLM)

Columbia Sportswear (NASDAQ:COLM) and Wacoal (OTCMKTS:WACLY) are both consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.

Dividends

Columbia Sportswear pays an annual dividend of $1.20 per share and has a dividend yield of 2.3%. Wacoal pays an annual dividend of $2.52 per share and has a dividend yield of 1.9%. Columbia Sportswear pays out 36.3% of its earnings in the form of a dividend. Wacoal pays out 33.8% 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.

Valuation and Earnings

This table compares Columbia Sportswear and Wacoal”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Columbia Sportswear	$3.37 billion	0.83	$223.27 million	$3.31	15.76
Wacoal	$1.14 billion	1.21	$46.13 million	$7.45	17.71

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

Analyst Recommendations

This is a summary of current ratings for Columbia Sportswear and Wacoal, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Columbia Sportswear	1	6	2	0	2.11
Wacoal	0	0	0	0	0.00

Columbia Sportswear currently has a consensus target price of $56.00, indicating a potential upside of 7.34%. Given Columbia Sportswear’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Columbia Sportswear is more favorable than Wacoal.

Insider and Institutional Ownership

47.8% of Columbia Sportswear shares are owned by institutional investors. 48.3% of Columbia Sportswear shares are owned by insiders. Comparatively, 0.8% of Wacoal shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Columbia Sportswear and Wacoal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Columbia Sportswear	5.45%	12.45%	7.50%
Wacoal	6.48%	5.46%	3.94%

Summary

Columbia Sportswear beats Wacoal on 10 of the 15 factors compared between the two stocks.

About Columbia Sportswear

Columbia Sportswear Company, together with its subsidiaries, designs, develops, markets, and distributes outdoor, active, and everyday lifestyle apparel, footwear, accessories, and equipment in the United States, Latin America, the Asia Pacific, Europe, the Middle East, Africa, and Canada. The company provides apparel, accessories, and equipment for hiking, trail running, snow, fishing, hunting, mountaineering, climbing, skiing and snowboarding, trail, and outdoor activities. It offers footwear products that include lightweight hiking boot; trail running shoes; rugged cold weather boots; sandals and shoes for use in water activities; and footwear for lifestyle wear. In addition, it owned network of branded and outlet retail stores; brand-specific e-commerce sites; and concession or franchise-based arrangements with third parties at branded outlet and shop-in-shop retail locations, as well as through independently operated specialty outdoor and sporting goods stores, sporting goods chains, department store chains, internet retailers, and international distributors. The company sells its products under the Columbia, Mountain Hard Wear, SOREL, and prAna brand names. Columbia Sportswear Company was founded in 1938 and is headquartered in Portland, Oregon.

About Wacoal

Wacoal Holdings Corp. engages in the manufacturing, wholesale, and retail sale of intimate apparel, outerwear, sportswear, and other textile products and accessories in Japan, Asia, Oceania, the United States, and Europe. The company operates through Wacoal Business (Domestic), Wacoal Business (Overseas), Peach John Business, and Other Businesses segments. It offers intimate apparel mainly women’s foundation wear, lingerie, nightwear and children’s underwear; and outerwear, sportswear, and other textile products and accessories. The company also engages in the restaurant, cultural and service-related businesses; and manufacture and sale of mannequins and fixtures, interior design work, and other textile-related businesses. It offers products through department stores, general merchandisers, and other general retailers in Japan, as well as directly managed retail stores, E-commerce websites, and distributors in Japan and internationally. Wacoal Holdings Corp. was founded in 1946 and is headquartered in Kyoto, Japan.