Callaway Golf (NYSE: ELY) and Johnson Outdoors (NASDAQ:JOUT) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, valuation, dividends and profitability.
Insider and Institutional Ownership
85.0% of Callaway Golf shares are owned by institutional investors. Comparatively, 60.4% of Johnson Outdoors shares are owned by institutional investors. 2.6% of Callaway Golf shares are owned by company insiders. Comparatively, 28.0% of Johnson Outdoors shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
This is a summary of current ratings and price targets for Callaway Golf and Johnson Outdoors, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Callaway Golf presently has a consensus target price of $14.89, suggesting a potential upside of 14.69%. Johnson Outdoors has a consensus target price of $46.50, suggesting a potential downside of 23.96%. Given Callaway Golf’s higher possible upside, equities research analysts clearly believe Callaway Golf is more favorable than Johnson Outdoors.
Valuation and Earnings
This table compares Callaway Golf and Johnson Outdoors’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Callaway Golf||$965.02 million||1.27||$89.78 million||$1.82||7.13|
|Johnson Outdoors||$473.75 million||1.13||$51.51 million||$3.23||18.93|
Callaway Golf has higher revenue and earnings than Johnson Outdoors. Callaway Golf is trading at a lower price-to-earnings ratio than Johnson Outdoors, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Callaway Golf has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500. Comparatively, Johnson Outdoors has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500.
Callaway Golf pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Johnson Outdoors pays an annual dividend of $0.36 per share and has a dividend yield of 0.6%. Callaway Golf pays out 2.2% of its earnings in the form of a dividend. Johnson Outdoors pays out 11.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
This table compares Callaway Golf and Johnson Outdoors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Callaway Golf beats Johnson Outdoors on 10 of the 16 factors compared between the two stocks.
Callaway Golf Company Profile
Callaway Golf Company designs, manufactures and sells golf clubs, golf balls, golf bags and other golf-related accessories. The Company has two segments: the golf clubs segment and golf balls segment. The golf clubs segment consists of its woods, hybrids, irons and wedges, and Odyssey putters. This segment also includes other golf-related accessories, royalties from licensing of its trademarks and service marks and sales of pre-owned golf clubs. The golf balls segment consists of Callaway Golf and Strata balls that are designed, manufactured and sold by the Company. It sells its products to retailers, directly and through its subsidiaries, and to third-party distributors. It sells pre-owned golf products through its Website, www.callawaygolfpreowned.com. In addition, it sells Callaway Golf and Odyssey products, including Toulon Design by Odyssey, directly to consumers through its Websites, www.callawaygolf.com and www.odysseygolf.com.
Johnson Outdoors Company Profile
Johnson Outdoors Inc. is a manufacturer and marketer of branded seasonal, outdoor recreation products. The Company operates through four segments: Marine Electronics, Outdoor Equipment, Watercraft and Diving. Its Marine Electronics segment’s brands are Minn Kota, Humminbird and Cannon. Its Outdoor Equipment segment’s brands are Eureka!, Jetboil and Silva. Its Watercraft segment designs and markets Necky sea touring kayaks; sit on top Ocean Kayaks, and Old Town canoes and kayaks for family recreation, touring, angling and tripping. The Company manufactures and markets underwater diving products for recreational divers, which it sells and distributes under the SCUBAPRO brand name. It markets a line of underwater diving and snorkeling equipment, including regulators, buoyancy compensators, dive computers and gauges, wetsuits, masks, fins, snorkels and accessories. The Company’s products are used for fishing from a boat, diving, paddling, hiking and camping.
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