Superior Group Of Companies, Inc. (NASDAQ: SGC)

Sector: Consumer Cyclical Industry: Apparel Manufacturing CIK: 0000095574
Market Cap 147.19 Mn
P/B 0.76
P/E 26.16
P/S 0.26
ROIC (Qtr) 3.41
Div Yield % 7.23
Rev 1y % (Qtr) -7.50
Total Debt (Qtr) 107.88 Mn
Debt/Equity (Qtr) 0.56

About

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 16.65M provide 2.73x coverage of short-term debt 6.09M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 364.40M provides 3.38x coverage of total debt 107.88M, indicating robust asset backing and low credit risk.
  • Retained earnings of 112.56M provide full 1.11x coverage of long-term debt 101.78M, indicating strong internal capital position.
  • Tangible assets of 364.40M provide robust 8.37x coverage of other current liabilities 43.55M, indicating strong asset backing.
  • Retained earnings of 112.56M represent substantial 0.58x of equity 193.84M, indicating strong internal capital generation.

Bear case

  • Operating cash flow of 10.20M barely covers its investment activities of (8.93M), with a coverage ratio of -1.14, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 16.65M against inventory of 105.66M, the 0.16 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 10.20M provides thin coverage of dividend payments of (9M) with a -1.13 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 16.65M provide limited coverage of acquisition spending of (4M), which is -4.16x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 10.20M shows concerning coverage of stock compensation expenses of 5.28M, with a 1.93 ratio indicating potential earnings quality issues.

Peer comparison

Companies in the Apparel Manufacturing
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 RL Ralph Lauren Corp 21.81 Bn 25.53 2.88 2.85 Bn
2 GIL Gildan Activewear Inc. 9.45 Bn 19.89 2.81 1.87 Bn
3 LEVI Levi Strauss & Co 8.22 Bn 13.64 1.29 2.29 Bn
4 VFC V F Corp 7.10 Bn 78.61 0.74 5.79 Bn
5 KTB Kontoor Brands, Inc. 3.40 Bn 15.62 1.20 1.50 Bn
6 PVH Pvh Corp. /De/ 3.39 Bn 9.96 0.38 4.26 Bn
7 COLM Columbia Sportswear Co 3.12 Bn 16.69 0.91 0.48 Bn
8 ZGN Ermenegildo Zegna N.V. 2.55 Bn 43.66 1.13 -

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.56 1.01
EV to Cash from Ops. EV/CFO 22.96 8.80
EV to Debt EV to Debt 2.17 4.30
EV to EBIT EV/EBIT 19.63 -5.31
EV to EBITDA EV/EBITDA 8.60 -69.89
EV to Free Cash Flow [EV/FCF] EV/FCF 44.44 15.55
EV to Market Cap EV to Market Cap 1.59 1.81
EV to Revenue EV/Rev 0.41 1.14
Price to Book Value [P/B] P/B 0.76 1.78
Price to Earnings [P/E] P/E 26.16 14.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.62 -1.16
Dividend Payout Ratio % Div Payout % (Qtr) 151.40 -3.95
Dividend per Basic Share Div per Share (Qtr) 0.56 0.51
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 156.42 20.82
Interest Coverage Int. cover (Qtr) 2.24 26.98
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -28.04 -10.62
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -9.37 10.71
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 2.94
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -47.37 -88.95
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -28.51 11.99
EBIT Growth (1y) % EBIT 1y % (Qtr) -48.01 -49.71
EBT Growth (1y) % EBT 1y % (Qtr) -58.75 -181.63
EPS Growth (1y) % EPS 1y % (Qtr) -55.95 -218.58
FCF Growth (1y) % FCF 1y % (Qtr) -86.89 -29.63
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -4.26 6.94
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.36 1.16
Cash Payout Ratio Cash Payout (Qtr) 0.59 0.15
Cash Ratio Cash Ratio (Qtr) 0.17 0.28
Current Ratio Curr Ratio (Qtr) 2.94 1.99
Debt to Equity Ratio Debt/Equity (Qtr) 0.56 -1.63
Interest Cover Ratio Int Coverage (Qtr) 2.24 26.98
Times Interest Earned Times Interest Earned (Qtr) 2.24 26.98
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 4.80 -6.73
EBIT Margin % EBIT Margin % (Qtr) 2.11 -10.67
EBT Margin % EBT Margin % (Qtr) 1.17 -17.44
Gross Margin % Gross Margin % (Qtr) 37.70 49.34
Net Profit Margin % Net Margin % (Qtr) 1.00 -18.93