Head to Head Analysis: Academy Sports and Outdoors (NASDAQ:ASO) vs. Smith & Wesson Brands (NASDAQ:SWBI)

Academy Sports and Outdoors (NASDAQ:ASO) and Smith & Wesson Brands (NASDAQ:SWBI) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, earnings and valuation.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Academy Sports and Outdoors and Smith & Wesson Brands, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Academy Sports and Outdoors	0	11	9	0	2.45
Smith & Wesson Brands	0	2	1	0	2.33

Academy Sports and Outdoors presently has a consensus price target of $59.42, indicating a potential upside of 16.74%. Smith & Wesson Brands has a consensus price target of $11.00, indicating a potential upside of 10.11%. Given Academy Sports and Outdoors’ stronger consensus rating and higher possible upside, equities analysts clearly believe Academy Sports and Outdoors is more favorable than Smith & Wesson Brands.

Dividends

Academy Sports and Outdoors pays an annual dividend of $0.52 per share and has a dividend yield of 1.0%. Smith & Wesson Brands pays an annual dividend of $0.52 per share and has a dividend yield of 5.2%. Academy Sports and Outdoors pays out 9.5% of its earnings in the form of a dividend. Smith & Wesson Brands pays out 273.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Academy Sports and Outdoors has raised its dividend for 3 consecutive years and Smith & Wesson Brands has raised its dividend for 4 consecutive years. Smith & Wesson Brands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Academy Sports and Outdoors and Smith & Wesson Brands”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Academy Sports and Outdoors	$5.93 billion	0.57	$418.45 million	$5.47	9.31
Smith & Wesson Brands	$474.66 million	0.94	$13.43 million	$0.19	52.58

Academy Sports and Outdoors has higher revenue and earnings than Smith & Wesson Brands. Academy Sports and Outdoors 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.

Risk and Volatility

Academy Sports and Outdoors has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500. Comparatively, Smith & Wesson Brands has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Profitability

This table compares Academy Sports and Outdoors and Smith & Wesson Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Academy Sports and Outdoors	6.27%	18.24%	7.18%
Smith & Wesson Brands	1.89%	2.34%	1.53%

Insider & Institutional Ownership

59.3% of Smith & Wesson Brands shares are owned by institutional investors. 3.6% of Academy Sports and Outdoors shares are owned by company insiders. Comparatively, 1.6% of Smith & Wesson Brands shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Academy Sports and Outdoors beats Smith & Wesson Brands on 12 of the 17 factors compared between the two stocks.

About Academy Sports and Outdoors

Academy Sports and Outdoors, Inc., through its subsidiaries, operates as a sporting goods and outdoor recreational retailer in the United States. The company outdoor division comprises camping products, such as coolers and drinkware, and camping accessories and equipment,; fishing products, including marine equipment and fishing rods, reels, and baits and equipment; and hunting products, which includes firearms, ammunition, archery and archery equipment, camouflage apparel, waders, shooting accessories, gun safes, optics, airguns, and hunting equipment. Its sports and recreation division offers fitness equipment, fitness accessories, and nutrition supplies; team and specialty sports equipment, including baseball, football, basketball, soccer, golf, racket sports, volleyball, backpacks, and sports bags; recreation products, which includes patio furniture, outdoor cooking, trampolines, play sets, watersports, and pet equipment, as well as wheeled goods including bicycles, skateboards, and other ride-on toys; and electronics and watches, as well as front-end products, such as consumables, batteries, etc. The company's apparel division provides outdoor and seasonal apparel, denim, work apparel, graphic t-shirts, and accessories; boys and girls outdoor, and athletic apparel; sporting and fitness apparel; and professional and collegiate team licensed apparel and accessories. Its footwear division offers casual shoes, slippers, seasonal footwear, and socks; work and western boots, shoes, and hunting footwear; boys and girls footwear; athletic footwear, such as running shoes, athletic lifestyle, and training shoes; and team and specialty sports footwear, and slides. The company sells its products under the Academy Sports + Outdoors, Magellan Outdoors, BCG, O'rageous, Game Winner, Outdoor Gourmet, and Freely brand names. Academy Sports and Outdoors, Inc. was founded in 1938 and is headquartered in Katy, Texas.

About Smith & Wesson Brands

Smith & Wesson Brands, Inc. is a holding company, which engages in the manufacture, design, and provision of firearms. Its portfolio includes handguns, long guns, handcuffs, suppressor, and other firearm-related products. The firm’s brands are Smith & Wesson, M&P, Thompson/Center Arms, and Gemtech. The company was founded by Horace Smith and Daniel Baird Wesson in 1852 and is headquartered in Maryville, TN.