What should you buy?
There are two things you cannot ignore. People become increasingly aware of sports, and people love gadgets. Put two and two together, and you can see why sports gadgets would be an important part of companies’ product mix. NIKE, Inc. (NYSE:NKE) is going further and is encouraging software developers to view its wristband device as a platform for creating apps. The company wants the device to become something you would not want to take off. NIKE, Inc. (NYSE:NKE) is doing well this year. The company is trading at 19.5 forward P/E and is paying a dividend that yields 1.40%.
Under Armour Inc (NYSE:UA) is moving in the same direction. Devices bring more engagement with the brand, so the impact goes beyond sales. This is important, because apparel companies must provide lifestyle solutions, or they get lost. This move could bring more steam into the Under Armour, which has solid cash position and little debt, but lacks rapid growth.
Garmin, which is trading at an attractive 14.5 forward P/E and is paying a dividend that yields 5.21%, is interesting from an income point of view. The company lacks growth, and it is not capitalizing on its technological leadership in the area of sports devices.
Good move from Under Armour Inc (NYSE:UA). The company, which trades at 31 forward P/E, needs more growth momentum to justify its price. Running is an area that is growing fast, so building products around this trend is a smart long-term move. Nike also does well on this front. The company states that running is one of its priorities and lives up to its words. Garmin needs to do something if it wants a slice of the pie. The company already has all the necessary technology to overcome the competitors. However, it does not seem to make a move that would encounter the competition. If it continues to ignore, it could see the market share of its cheapest devices sink. These devices target the biggest part of the running market, so it is a prize worth fighting for.
The article This Device Should Bring More Growth for Under Armour originally appeared on Fool.com and is written by Vladimir Zernov.
Vladimir Zernov has no position in any stocks mentioned. The Motley Fool recommends Nike and Under Armour. The Motley Fool owns shares of Nike and Under Armour. Vladimir is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.