Smith & Wesson Brands (NASDAQ:SWBI) and American Outdoor Brands (NASDAQ:AOBC) are both small-cap consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.
Volatility and Risk
Smith & Wesson Brands has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500. Comparatively, American Outdoor Brands has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.
This table compares Smith & Wesson Brands and American Outdoor Brands’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Smith & Wesson Brands||-9.03%||10.26%||5.76%|
|American Outdoor Brands||2.38%||6.30%||3.56%|
This is a breakdown of current ratings and target prices for Smith & Wesson Brands and American Outdoor Brands, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Smith & Wesson Brands||0||1||2||0||2.67|
|American Outdoor Brands||0||2||2||0||2.50|
Smith & Wesson Brands presently has a consensus price target of $21.00, indicating a potential downside of 2.42%. American Outdoor Brands has a consensus price target of $10.50, indicating a potential downside of 47.68%. Given Smith & Wesson Brands’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Smith & Wesson Brands is more favorable than American Outdoor Brands.
Earnings & Valuation
This table compares Smith & Wesson Brands and American Outdoor Brands’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Smith & Wesson Brands||$678.39 million||1.76||-$61.23 million||$0.82||26.24|
|American Outdoor Brands||$638.28 million||1.73||$18.41 million||$0.83||24.18|
American Outdoor Brands has lower revenue, but higher earnings than Smith & Wesson Brands. American Outdoor Brands is trading at a lower price-to-earnings ratio than Smith & Wesson Brands, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
67.0% of Smith & Wesson Brands shares are owned by institutional investors. Comparatively, 67.0% of American Outdoor Brands shares are owned by institutional investors. 2.7% of Smith & Wesson Brands shares are owned by insiders. Comparatively, 2.7% of American Outdoor Brands shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Smith & Wesson Brands beats American Outdoor Brands on 6 of the 10 factors compared between the two stocks.
About Smith & Wesson Brands
Smith & Wesson Brands, Inc. is a holding company, which engages in the manufacture, design, and provision of firearms. It operates through the Firearms and Outdoor Products & Accessories segments. The Firearms segment comprises the manufacture of handguns, long guns, handcuffs, suppressors, and other firearm-related products for sale to a wide variety of customers. The Outdoor Products & Accessories segment engages in the distribution, manufacture, and design of reloading, gunsmithing, and gun cleaning supplies; stainless-steel cutting tools and accessories; flashlights; tree saws and related trimming accessories; shooting supplies, rests, and other related accessories; apparel; vault accessories; laser grips and laser sights; and a full range of products for survival and emergency preparedness. The company was founded by Michell A. Saltz on June 17, 1991 and is headquartered in Springfield, MA.
About American Outdoor Brands
American Outdoor Brands Corporation designs, manufactures, and sells firearms worldwide. The company's Firearms segment offers handguns, long guns, handcuffs, suppressors, and other firearm-related products under the Smith & Wesson, M&P, Performance Center, Gemtech, and Thompson/Center Arms brands. It also sells parts purchased through third parties; operates a private law enforcement training facility; and provides manufacturing services to other businesses under the Smith & Wesson and Smith & Wesson Precision Components brands. This segment sells its products to gun enthusiasts, collectors, hunters, sportsmen, competitive shooters, individuals desiring home and personal protection, law enforcement and security agencies and officers, and military agencies. The company's Outdoor Products & Accessories segment offers reloading, gunsmithing, and gun cleaning supplies; stainless steel cutting tools and accessories; flashlights, tree saws, and related trimming accessories; shooting supplies, rests, and other related accessories; apparel; vault accessories; laser grips and laser sights; and a range of products for survival and emergency preparedness, as well as field rests, knives, gun vises, hearing protection products, camping and survival gears, and case tumblers. It provides its products under the Caldwell, Wheeler, Tipton, Frankford Arsenal, Smith & Wesson, M&P, Thompson/Center, Lockdown, Hooyman, BOG-POD, Golden Rod, Non-Typical, Crimson Trace, Imperial, Schrade, Old Timer, Bubba Blade, UST, and KeyGear brands. The company markets its products through dealers, retailers, in-store retail channels, and range operations; social and electronic media; in-store retail merchandising systems and strategies; and Websites and online retail stores. The company was formerly known as Smith & Wesson Holding Corporation and changed its name to American Outdoor Brands Corporation in January 2017. The company was founded in 1852 and is based in Springfield, Massachusetts.
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