American Outdoor Brands (NASDAQ:AOBC) and Smith & Wesson Brands (NASDAQ:SWBI) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, risk and institutional ownership.
Institutional & Insider Ownership
67.0% of American Outdoor Brands shares are owned by institutional investors. Comparatively, 67.0% of Smith & Wesson Brands shares are owned by institutional investors. 2.7% of American Outdoor Brands shares are owned by company insiders. Comparatively, 2.7% of Smith & Wesson Brands shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Risk and Volatility
American Outdoor Brands has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500. Comparatively, Smith & Wesson Brands has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500.
This table compares American Outdoor Brands and Smith & Wesson Brands’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|American Outdoor Brands||2.38%||6.30%||3.56%|
|Smith & Wesson Brands||-9.03%||10.26%||5.76%|
Valuation and Earnings
This table compares American Outdoor Brands and Smith & Wesson Brands’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|American Outdoor Brands||$638.28 million||2.00||$18.41 million||$0.83||27.93|
|Smith & Wesson Brands||$678.39 million||1.78||-$61.23 million||$0.82||26.57|
American Outdoor Brands has higher earnings, but lower revenue than Smith & Wesson Brands. Smith & Wesson Brands is trading at a lower price-to-earnings ratio than American Outdoor Brands, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current recommendations and price targets for American Outdoor Brands and Smith & Wesson Brands, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|American Outdoor Brands||0||2||2||0||2.50|
|Smith & Wesson Brands||0||1||2||0||2.67|
American Outdoor Brands currently has a consensus target price of $10.50, indicating a potential downside of 54.70%. Smith & Wesson Brands has a consensus target price of $21.00, indicating a potential downside of 3.63%. Given Smith & Wesson Brands’ stronger consensus rating and higher possible upside, analysts plainly believe Smith & Wesson Brands is more favorable than American Outdoor Brands.
Smith & Wesson Brands beats American Outdoor Brands on 6 of the 11 factors compared between the two stocks.
American Outdoor Brands Company Profile
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.
Smith & Wesson Brands Company Profile
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.
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