Under Armour P-E Ratios

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The company that we selected to analyze is Under Armour. Under Armour was incorporated as a Maryland corporation in 1996 that markets and distributes performance apparel. This organization strives to connect with consumers to assist in increasing their development of innovative apparel designs. Their products directly impact how athletes train and perform for their respective athletic activities. The company was founded in 1995 by Kevin Plank who was playing football for the University of Maryland football team. Plank being known as the sweatiest guy on the team wanted a more comfortable t-shirt then the original cotton tee. After graduation he set the goal to create an optimal t-shirt for athletic performance and he soon discovered the fabric…show more content…
After determining the market price of the common stocks (UAA = $29.05, UA = $25.17) and dividing them by the diluted earnings per share (UAA = $0.45, UA = $0.71), the price-earnings ratios could be calculated. UAA has a price-earnings ratio of 64.55 and UA has a price-earnings ratio of 35.45. In terms of the P-E ratio, the lower the number, the better. UA has a slightly negative P-E ratio and UAA has a very negative ratio. " A low P-E might indicate a number of negative factors, including, but not limited to projected lower earnings. However, it is important to note that each value should be looked at in combination with other factors" ( This may not be the case for Under Armour as the company 's retained earnings continue to increase. Although, these negative values should be frequently considered when investing in the company because the more negative the ratio becomes, the less money the company may be earning, and as a result may reduce interest from potential investors. Dividend Payments: According to Figure 5.3, $59,000,000 in dividends were paid. $2,927,000 was paid in the form of cash dividends, and the remaining $56,073,000 was paid in the form of non-cash dividends. These dividends were paid to Class C capital stockholders as a result of a stock split earlier in the
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