Contrasting Adidas (ADDYY) and Johnson Outdoors (JOUT)

Adidas (OTCMKTS: ADDYY) and Johnson Outdoors (NASDAQ:JOUT) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitability and analyst recommendations.

Dividends

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Adidas pays an annual dividend of $0.80 per share and has a dividend yield of 0.6%. Johnson Outdoors pays an annual dividend of $0.48 per share and has a dividend yield of 0.8%. Adidas pays out 20.2% of its earnings in the form of a dividend. Johnson Outdoors pays out 15.6% 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. Johnson Outdoors is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Adidas and Johnson Outdoors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Adidas 5.07% 22.20% 9.55%
Johnson Outdoors 6.10% 15.95% 10.73%

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Adidas 0 5 3 0 2.38
Johnson Outdoors 0 1 2 0 2.67

Adidas currently has a consensus target price of $210.00, indicating a potential upside of 61.78%. Johnson Outdoors has a consensus target price of $73.50, indicating a potential upside of 14.97%. Given Adidas’ higher probable upside, equities research analysts clearly believe Adidas is more favorable than Johnson Outdoors.

Institutional & Insider Ownership

0.1% of Adidas shares are owned by institutional investors. Comparatively, 62.7% of Johnson Outdoors shares are owned by institutional investors. 18.5% of Johnson Outdoors shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Adidas has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, Johnson Outdoors has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500.

Earnings and Valuation

This table compares Adidas and Johnson Outdoors’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Adidas $23.97 billion 2.18 $1.24 billion $3.96 32.78
Johnson Outdoors $490.57 million 1.30 $35.15 million $3.08 20.76

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

Summary

Adidas beats Johnson Outdoors on 9 of the 16 factors compared between the two stocks.

About Adidas

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.

About Johnson Outdoors

Johnson Outdoors Inc. designs, manufactures, and markets outdoor equipment, diving, watercraft, and marine electronics products worldwide. The company's Fishing segment offers battery-powered fishing motors for trolling or primary propulsion, marine battery chargers, and shallow water anchors; sonar and GPS equipment for fish finding, navigation, and marine cartography; and downriggers for controlled-depth fishing. This segment sells its products under the Minn Kota, Humminbird, and Cannon brands through outdoor specialty and Internet retailers, retail store chains, marine products distributors, original equipment manufacturers, and distributors. Its camping segment offers consumer, commercial, and military tents and accessories; sleeping bags; camping furniture and stoves; other recreational camping products; and portable outdoor cooking systems, as well as acts as a subcontract manufacturer for other providers of military tents. This segment sells its products under the Eureka! and Jetboil brands through independent sales representatives and Internet retailers. The company's Watercraft Recreation segment provides kayaks, canoes, personal flotation devices, and paddles through independent specialty and outdoor retailers under the Ocean Kayaks, Old Town, and Carlisle brands. Its diving segment manufactures and markets underwater diving and snorkeling equipment, including regulators, buoyancy compensators, dive computers and gauges, wetsuits, masks, fins, snorkels, and accessories under the SCUBAPRO brand name. This segment also provides regular maintenance, product repair, diving education, and travel program services; and sells diving gear to dive training centers, resorts, public safety units, and armed forces. It sells its products through specialty dive stores, as well as through Websites. Johnson Outdoors Inc. was founded in 1970 and is headquartered in Racine, Wisconsin.

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