Rocky Brands (NASDAQ: RCKY) and Weyco Group (NASDAQ:WEYS) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.
This table compares Rocky Brands and Weyco Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Rocky Brands pays an annual dividend of $0.44 per share and has a dividend yield of 3.1%. Weyco Group pays an annual dividend of $0.88 per share and has a dividend yield of 3.2%. Rocky Brands pays out 118.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Weyco Group pays out 56.8% of its earnings in the form of a dividend. Weyco Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
Rocky Brands has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, Weyco Group has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500.
This is a summary of recent recommendations for Rocky Brands and Weyco Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Rocky Brands presently has a consensus price target of $12.00, indicating a potential downside of 14.59%. Weyco Group has a consensus price target of $26.00, indicating a potential downside of 4.48%. Given Weyco Group’s higher probable upside, analysts clearly believe Weyco Group is more favorable than Rocky Brands.
Valuation & Earnings
This table compares Rocky Brands and Weyco Group’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Rocky Brands||$261.70 million||0.40||$16.11 million||$0.37||37.97|
|Weyco Group||$287.74 million||0.98||$26.44 million||$1.55||17.56|
Weyco Group has higher revenue and earnings than Rocky Brands. Weyco Group is trading at a lower price-to-earnings ratio than Rocky Brands, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
53.3% of Rocky Brands shares are owned by institutional investors. Comparatively, 32.3% of Weyco Group shares are owned by institutional investors. 8.5% of Rocky Brands shares are owned by insiders. Comparatively, 42.8% of Weyco Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Weyco Group beats Rocky Brands on 13 of the 14 factors compared between the two stocks.
Rocky Brands Company Profile
Rocky Brands, Inc. is a designer, manufacturer and marketer of footwear and apparel marketed under a portfolio of brand names, including Rocky, Georgia Boot, Durango, Lehigh, Creative Recreation and the licensed brand Michelin. The Company operates its business through three segments: wholesale, retail and military. In its wholesale segment, the Company distributes its products through a range of distribution channels representing over 10,000 retail store locations in the United States and Canada, as well as in other international markets. Its wholesale channels vary by product line and include sporting goods stores, outdoor retailers, independent shoe retailers, hardware stores, catalogs, mass merchants and uniform stores. In its retail segment, the Company sells its products directly to consumers through its consumer and business direct Websites and its Rocky outlet store. In its military segment, the Company sells footwear under the Rocky label to the United States military.
Weyco Group Company Profile
Weyco Group, Inc. is engaged in the design and distribution of footwear. The Company designs and markets footwear for men, women and children. The Company operates through two segments: the North American wholesale segment (wholesale) and the North American retail segment (retail). The Company also has other wholesale and retail businesses overseas, which include its businesses in Australia, South Africa and Asia Pacific (collectively known as Florsheim Australia), and its wholesale and retail businesses in Europe (Florsheim Europe). Its products consist of leather dress shoes and casual footwear composed of man-made materials or leather. In addition, the Company offers outdoor boots, shoes and sandals. As of December 31, 2016, the Company’s shoes were marketed throughout the United States and Canada in over 10,000 shoe, clothing and department stores. As of December 31, 2016, the retail segment consisted of 13 Company-operated stores and an Internet business in the United States.
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