Better Buy: NIKE, Inc. (NKE) or Under Armour Inc (UA)?

In addition, while Under Armour Inc (NYSE:UA) may enjoy greater overall growth potential at one-eighth of NIKE, Inc. (NYSE:NKE)’s current market capitalization of almost $58 billion, Nike sports a higher net profit margin of 9.2% (compared to Under Armour’s at just 6.3%). Even better, Nike also has a fortress-like balance sheet with more than $4 billion in cash and investments, and just $161 million in long-term debt. As a result, Nike shareholders can collect a solid 1.3% dividend yield while Nike stock trades at a much more reasonable 25 times last year’s earnings, and 21 times next year’s estimates.

Survey says…
So which stock is the better buy today? Truthfully, it depends on your particular investing needs.

NIKE, Inc. (NYSE:NKE) is a undoubtedly a solid, lower-risk company that will likely be rewarding shareholders long after you and I are gone. However, if you have a long-term time frame and don’t mind taking the added risk (and wild price swings) of investing in a smaller growth company, I still think Under Armour Inc (NYSE:UA) will ultimately prove the better bet down the road.

Fool contributor Steve Symington owns shares of Under Armour. The Motley Fool recommends Nike and Under Armour. The Motley Fool owns shares of Nike and Under Armour.

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