Polaris (NYSE:PII) and Johnson Outdoors (NASDAQ:JOUT) Critical Contrast

Johnson Outdoors (NASDAQ:JOUT) and Polaris (NYSE:PII) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Earnings & Valuation

This table compares Johnson Outdoors and Polaris”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Johnson Outdoors	$592.41 million	0.78	-$34.29 million	($0.85)	-51.98
Polaris	$7.15 billion	0.46	-$465.50 million	($4.63)	-12.51

Johnson Outdoors has higher earnings, but lower revenue than Polaris. Johnson Outdoors is trading at a lower price-to-earnings ratio than Polaris, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Johnson Outdoors and Polaris, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Johnson Outdoors	0	2	0	0	2.00
Polaris	1	10	1	1	2.15

Polaris has a consensus target price of $67.38, suggesting a potential upside of 16.34%. Given Polaris’ stronger consensus rating and higher probable upside, analysts clearly believe Polaris is more favorable than Johnson Outdoors.

Insider & Institutional Ownership

64.0% of Johnson Outdoors shares are held by institutional investors. Comparatively, 88.1% of Polaris shares are held by institutional investors. 28.2% of Johnson Outdoors shares are held by insiders. Comparatively, 2.4% of Polaris shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Johnson Outdoors and Polaris’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Johnson Outdoors	-1.21%	4.26%	2.90%
Polaris	-3.50%	16.77%	2.91%

Dividends

Johnson Outdoors pays an annual dividend of $1.32 per share and has a dividend yield of 3.0%. Polaris pays an annual dividend of $2.72 per share and has a dividend yield of 4.7%. Johnson Outdoors pays out -155.3% of its earnings in the form of a dividend. Polaris pays out -58.7% 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. Johnson Outdoors has increased its dividend for 11 consecutive years and Polaris has increased its dividend for 30 consecutive years. Polaris is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Johnson Outdoors has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500. Comparatively, Polaris has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500.

Summary

Polaris beats Johnson Outdoors on 12 of the 18 factors compared between the two stocks.

About Johnson Outdoors

Johnson Outdoors Inc. designs, manufactures, and markets seasonal and outdoor recreational products for fishing worldwide. It operates through four segments: Fishing, Camping, Watercraft Recreation, and Diving. The Fishing segment offers electric motors for trolling, marine battery chargers, and shallow water anchors; sonar and GPS equipment for fish finding, navigation, and marine cartography; and downriggers for controlled-depth fishing. This segment sells its products under the Minn Kota, Humminbird, and Cannon brands through outdoor specialty and Internet retailers, retail store chains, original equipment manufacturers, and distributors. The Camping segment provides consumer, commercial, and military tents and accessories; camping stoves; other recreational camping products; and portable outdoor cooking systems. This segment sells its products under the Eureka! and Jetboil brands through specialty stores, sporting goods stores, internet retailers, and direct to consumers. The Watercraft Recreation segment offers kayaks, canoes, and paddles for family recreation, touring, angling, and tripping through independent specialty and outdoor retailers under Old Town and Carlisle brands. The Diving segment manufactures and markets underwater diving and snorkeling equipment, such as regulators, buoyancy compensators, dive computers and gauges, wetsuits, masks, fins, snorkels, and accessories through independent specialty dive stores and diving magazines under the SCUBAPRO brand name. This segment also provides regular maintenance, product repair, diving education, and travel program services; and sells diving gear to dive training centers, resorts, and public safety units. It sells its products through websites. The company was founded in 1970 and is headquartered in Racine, Wisconsin.

About Polaris

Polaris Inc. designs, engineers, manufactures, and markets powersports vehicles in the United States, Canada, and internationally. It operates through three segments: Off-Road, On-Road, and Marine. The company offers off-road vehicles (ORVs), including all-terrain vehicles and side-by-side vehicles; military and commercial ORVs; snowmobiles; motorcycles; and moto-roadsters, quadricycles, and boats. It also provides ORV accessories comprising winches, bumper/brushguards, plows, racks, wheels and tires, pull-behinds, cab systems, lighting and audio systems, cargo box accessories, tracks, and oil; snowmobile accessories, which include covers, traction products, reverse kits, electric starters, tracks, bags, windshields, oil, and lubricants; and motorcycle accessories, such as saddle bags, handlebars, backrests, exhausts, windshields, seats, oil, and various chrome accessories. In addition, the company offers light duty hauling and passenger vehicles; gear and apparel, such as helmets, goggles, jackets, gloves, boots, bibs, hats, pants, and leathers; and pontoon and deck boats. The company provides its products through dealers and distributors, and online; and retail and e-commerce marketplaces. The company was formerly known as Polaris Industries Inc. Polaris Inc. was founded in 1945 and is headquartered in Medina, Minnesota.