One of the best ways to secure your portfolio is to find a balance between risky investments and high-end stocks. The latter provides stability, yields a dividend, and gives you some security in scenarios where your riskier stocks underperform.
Adidas is one such investment. But considering it raises a series of questions like:
- How to buy Adidas stock?
- Are Adidas shares good for my portfolio?
- What is the current condition of the company?
Buyers from the US might have even greater difficulty because they’re buying a foreign company’s stock.
So, for all those interested in buying Adidas shares, here’s a brief rundown of all you need to know.
About the Company
Adidas is the largest sportswear manufacturer in Europe and the second-biggest worldwide (only after Nike). For this very reason, Adidas stocks are always in great demand.
The brand was launched in 1949 as a result of a sibling rivalry. The founder, Adolf Dassler (Adi Das), and his older brother Rudolf Dassler, got into a decades-long feud, splitting the family business Gebrüder into two separate companies — Adidas and Puma.
After the death of Adolf Dassler’s son Horst in 1989, French industrialist Bernard Tapie bought the company. He owned it until 1993 but failed to revive it amid growing competition and his own financial struggles. The company was then sold to investors. Today, Adidas’ equity is so segmented that the largest stockholder, BBR Partners LLC, owns merely 0.03% of the company (119,451 shares).
In 1989, the company changed its name to ‘Adidas AG, Stock Corporation’. Only six years later, in 1995, Adidas became publicly traded on the Frankfurt Stock Exchange under the ADDYY ticker symbol. Since 1998 the company has been on the DAX30 index, which lists Germany’s 30 most valuable stocks.
How much is Adidas worth?
As of 2021, the Adidas market value is $14.34 billion. While this is quite a bit, it’s a significant fall compared to the $16.48 in 2020 and the $16.67 billion in 2019.
Seeing as how the COVID-19 pandemic postponed or canceled many sporting events (including the 2020 Olympics), the fall in the Adidas company value is hardly surprising. After all, Adidas is primarily a manufacturer of sports shoes and apparel, and its marketing campaigns are tied to such events.
At the same time, there are a lot of analysts who see a bright future for Adidas, considering the brand’s growing presence in North America. This is more than apparent by its increase in revenue in the region.
What other companies does Adidas own?
The Adidas group consists of numerous brands, most of which you already know but had no idea belonged to this corporation. The most popular are Runtastic, Matrix and Reebok. The latter, however, was divested in 2021 as part of Adidas’ new five-year strategy.
Other than this, the company also owns a large share of the German football club Bayern Munich. With such a diverse portfolio, Adidas stocks offer quite a bit of financial resilience.
Should You Buy Adidas Stock?
Whether or not Adidas is a buy in 2021 is up to a debate. The stock has outperformed some of its closest rivals (like Nike) over the past several years. However, there are always other factors to consider.
Adidas stock performance
First, let’s check out the recent performance of the ADDYY stock.
Globally, Adidas is the world’s second most popular shoe manufacturing company (behind Nike). It’s No.1 in Europe, No.2 in China, and No.3 in North America. Overall, an incredible performance of the company.
Last year, due to the Coronavirus pandemic, net sales dropped by 16%. While this may sound bad, it’s important to stress out two things.
- The pandemic made all sports apparel manufacturers underperform.
- In 2019, the sales grew by a whopping 9%.
The gross margin of Adidas is 50%, and it’s expected to reach 52% by the end of 2021.
And the Adidas market cap is €52.62 billion (roughly $60.87 billion).
So, to sum up, the company’s profitability is back on the rise, net income margin is consistent, and there is very strong interest coverage.
Choosing the right stock for your portfolio is never a simple task. Each investment opportunity needs to have a purpose, a part to play in the larger scheme of things.
For instance, if you’re a more aggressive investor, you must have a portion of high-end stocks. This is one of the reasons to look up how to buy Adidas stock.
Second, if you’re looking to secure an investment, the company’s reputation is a huge consideration. Since Adidas is a household name in the sports shoes and apparel manufacturing field, the company is as credible and trustworthy as it gets.
Lastly, it might be a good idea to screen a stock (despite what you think you know about the company). Taking a look at stock analysis articles before placing a buy order is also a smart move.
How to Buy Adidas Stock
Once you’ve decided to buy Adidas stock, it comes down to the technical aspect of the purchase. First, you need to find a reliable stock broker.
Next, you need to learn how to do proper research before placing an order. For this, you need to find and learn how to use a reliable stock screener. Remember that the Adidas ticker is ADDYY, which is a piece of info you’ll need to fully utilize these screener tools.
Finally, you need to look for suitable trading platforms.
There is a number of platforms worth taking into consideration, some of which are:
Each of the brokers has its strengths and flaws, which is why studying them extensively (through reviews) is a smart move.
How to invest in Adidas?
Investing in Adidas is a fairly technical issue. All you need is to find the right trading platform and register. Then, you need to pick Adidas stock and place an order.
While the technical aspect of this purchase is clearly more complex than that, this is completely irrelevant from the individual investor’s standpoint. After all, the whole process is handled by a brokerage firm and simplified on an online platform.
How to buy Adidas stock in the US?
One question that troubles most US-based investors is how to buy this international stock in the States. This is quite simple actually through the ADR PROGRAM and Adidas AG American Depositary Receipts (ADRs).
Adidas AG ADRs are dollar-denominated securities backed by shares trading in Germany.
The ratio between ADR and ordinary shares is 2:1, which means that two Adidas AG ADRs are equivalent in value to one Adidas AG ordinary share.
Adidas stock price
The Adidas stock value varies. While the company sales went down by 16% in 2020, 2021 seems to be a lot more stable in this regard. Therefore, the fluctuations of the stock price are not nearly as severe.
Since the beginning of 2021, the value of the Adidas share price has moved between €252 and €336.
It’s also worth mentioning that the Adidas dividend yield is 1.15%.
At the moment, Adidas appears to be a strong buy. However, there are several factors you need to bear in mind.
- First of all, the company has a pretty decent recovery after the disastrous 2020. And its performance in 2017, 2018, and 2019 has been more than stellar.
- Second, the company’s current leadership has come up with a great five-year strategy (back in 2015). The results of this can be seen on ADDYY stock price over the past several years.
- Marketing efforts and past campaigns have been successful across all demographics.
There are some problems, as well.
- Accusations of bribes to certain NCAA players might negatively affect the company in the near future. Still, this scandal would affect its closest competitors (Nike and Under Armour) as well.
Nonetheless, when examining the stock performance and company trends, Adidas seems to be heading in the right direction.
Adidas is a publicly-traded company, which means that buying its shares is a fairly simple process. All you need is a credible broker and some research to ensure that this investment will fit your portfolio.
The ADR program (American Depositary Receipt) makes non-US companies like Adidas available to US investors. This ADR is priced in US dollars and traded on the US exchange, which is necessary since Adidas is a German company. The ARD-to-ordinary shares ratio is 2:1. This means that two AG ADRs shares are the equivalent of one Adidas ordinary share.
Adidas has been a public company since 1995, just six years after becoming a corporation.
Adidas is traded on OTC Markets Group (OTCMKTS: ADDYY), specifically its OTCQX International Premier market. Either way, US-based investors looking at how to buy Adidas stock should look into the ADR Program.