Analyzing Kontoor Brands (NYSE:KTB) & Birkenstock (NYSE:BIRK)

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

Risk and Volatility

Kontoor Brands has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, Birkenstock has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kontoor Brands	8.21%	59.71%	12.94%
Birkenstock	14.82%	13.36%	7.21%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Kontoor Brands and Birkenstock, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kontoor Brands	1	4	7	0	2.50
Birkenstock	1	5	13	0	2.63

Kontoor Brands currently has a consensus target price of $96.56, indicating a potential upside of 26.99%. Birkenstock has a consensus target price of $51.91, indicating a potential upside of 59.40%. Given Birkenstock’s stronger consensus rating and higher probable upside, analysts plainly believe Birkenstock is more favorable than Kontoor Brands.

Valuation & Earnings

This table compares Kontoor Brands and Birkenstock”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kontoor Brands	$3.15 billion	1.32	$227.45 million	$4.79	15.87
Birkenstock	$2.32 billion	2.50	$385.46 million	$2.13	15.29

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

Institutional and Insider Ownership

93.1% of Kontoor Brands shares are owned by institutional investors. Comparatively, 19.9% of Birkenstock shares are owned by institutional investors. 1.8% of Kontoor Brands shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

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 Birkenstock

Birkenstock Holding plc manufactures and sells footwear products. It also offers sandals, shoes, closed-toe silhouettes, skincare products, and accessories. The company sells its products through e-commerce sites and a network of owned retail stores, as well as business-to-business channels. It operates in the United States, Brazil, Canada, Mexico, Europe, APMA, and internationally. Birkenstock Holding plc was founded in 1774 and is based in London, the United Kingdom. Birkenstock Holding plc is a subsidiary of BK LC Lux MidCo S.à r.l.