Polaris Industries (PII) and American Outdoor Brands Corporation (AOBC) Critical Review

Polaris Industries (NYSE: PII) and American Outdoor Brands Corporation (NASDAQ:AOBC) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, profitability and risk.

Valuation and Earnings

This table compares Polaris Industries and American Outdoor Brands Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Polaris Industries $5.00 billion 1.32 $526.01 million $2.39 44.08
American Outdoor Brands Corporation $825.26 million 0.97 $204.58 million $1.60 9.26

Polaris Industries has higher revenue and earnings than American Outdoor Brands Corporation. American Outdoor Brands Corporation is trading at a lower price-to-earnings ratio than Polaris Industries, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Polaris Industries has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500. Comparatively, American Outdoor Brands Corporation has a beta of -0.02, meaning that its share price is 102% less volatile than the S&P 500.

Dividends

Polaris Industries pays an annual dividend of $2.32 per share and has a dividend yield of 2.2%. American Outdoor Brands Corporation does not pay a dividend. Polaris Industries pays out 97.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Polaris Industries has increased its dividend for 5 consecutive years.

Institutional & Insider Ownership

94.8% of Polaris Industries shares are held by institutional investors. Comparatively, 72.5% of American Outdoor Brands Corporation shares are held by institutional investors. 2.2% of Polaris Industries shares are held by company insiders. Comparatively, 2.3% of American Outdoor Brands Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Polaris Industries and American Outdoor Brands Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Polaris Industries 3.13% 26.47% 7.80%
American Outdoor Brands Corporation 10.96% 27.91% 14.47%

Analyst Ratings

This is a summary of recent recommendations and price targets for Polaris Industries and American Outdoor Brands Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Polaris Industries 2 9 3 0 2.07
American Outdoor Brands Corporation 0 5 5 0 2.50

Polaris Industries presently has a consensus price target of $90.09, indicating a potential downside of 14.49%. American Outdoor Brands Corporation has a consensus price target of $19.35, indicating a potential upside of 30.57%. Given American Outdoor Brands Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe American Outdoor Brands Corporation is more favorable than Polaris Industries.

Summary

Polaris Industries beats American Outdoor Brands Corporation on 9 of the 17 factors compared between the two stocks.

Polaris Industries Company Profile

Polaris Industries Inc. designs, engineers and manufactures powersports vehicles, which include Off-Road Vehicles (ORV), including All-Terrain Vehicles (ATV) and side-by-side vehicles for recreational and utility use; Snowmobiles, Motorcycles and Global Adjacent Markets vehicles, including Work and Transportation and military vehicles. The Company’s segments include ORV/Snowmobiles, Motorcycles, Global Adjacent Markets, and Other. Its ORVs includes the RZR sport side-by-side, the RANGER utility side-by-side, the GENERAL crossover side-by-side, the Sportsman ATV and the Polaris ACE. It produces a range of snowmobiles consisting of approximately 40 models. It offers a range of motorcycles under Indian motorcycles and Slingshot brands. The Global Adjacent Markets vehicles include low emission vehicles, light duty hauling, passenger vehicles and industrial vehicles. The Other segment includes business of TAP Automotive Holdings, LLC, a manufacturer of off-road Jeep and truck accessories.

American Outdoor Brands Corporation Company Profile

American Outdoor Brands Corporation, formerly Smith & Wesson Holding Corporation, is a manufacturer of firearms and a provider of accessory products for the shooting, hunting and outdoor enthusiast. The Company operates through two segments. The Firearms segment manufactures handgun and long gun products sold under the Smith & Wesson, M&P and Thompson/Center Arms brands, as well as providing forging, machining and precision plastic injection molding services. The Outdoor Products & Accessories segment provides shooting, hunting and outdoor accessories, including reloading, gunsmithing, gun cleaning supplies, tree saws, vault accessories, knives, laser sighting systems and tactical lighting products. Brands in Outdoor Products & Accessories include Crimson Trace, Caldwell Shooting Supplies, Wheeler Engineering, Lockdown Vault Accessories, BOG POD and Golden Rod Moisture Control, as well as knives and specialty tools under Schrade, Old Timer, Uncle Henry and Imperial.

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