Critical Review: Sturm, Ruger & Company, Inc. (NYSE:RGR) vs. Latham Group (NASDAQ:SWIM)

Sturm, Ruger & Company, Inc. (NYSE:RGR) and Latham Group (NASDAQ:SWIM) are both small-cap consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, earnings, dividends and risk.

Insider & Institutional Ownership

64.0% of Sturm, Ruger & Company, Inc. shares are owned by institutional investors. Comparatively, 84.0% of Latham Group shares are owned by institutional investors. 4.6% of Sturm, Ruger & Company, Inc. shares are owned by insiders. Comparatively, 3.3% of Latham Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Sturm, Ruger & Company, Inc. and Latham Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sturm, Ruger & Company, Inc.	$546.06 million	1.47	-$4.39 million	$0.75	66.87
Latham Group	$545.91 million	1.76	$11.12 million	$0.05	163.60

Latham Group has lower revenue, but higher earnings than Sturm, Ruger & Company, Inc.. Sturm, Ruger & Company, Inc. is trading at a lower price-to-earnings ratio than Latham Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Sturm, Ruger & Company, Inc. and Latham Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sturm, Ruger & Company, Inc.	0	2	1	0	2.33
Latham Group	3	3	1	0	1.71

Sturm, Ruger & Company, Inc. currently has a consensus target price of $46.00, indicating a potential downside of 8.28%. Latham Group has a consensus target price of $7.83, indicating a potential downside of 4.24%. Given Latham Group’s higher possible upside, analysts plainly believe Latham Group is more favorable than Sturm, Ruger & Company, Inc..

Profitability

This table compares Sturm, Ruger & Company, Inc. and Latham Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sturm, Ruger & Company, Inc.	2.11%	6.58%	5.35%
Latham Group	1.55%	4.70%	2.24%

Volatility & Risk

Sturm, Ruger & Company, Inc. has a beta of 0.11, indicating that its share price is 89% less volatile than the S&P 500. Comparatively, Latham Group has a beta of 1.71, indicating that its share price is 71% more volatile than the S&P 500.

Summary

Sturm, Ruger & Company, Inc. beats Latham Group on 7 of the 13 factors compared between the two stocks.

About Sturm, Ruger & Company, Inc.

Sturm, Ruger & Co., Inc. engages in the business of designing, manufacturing, and selling firearms to domestic customers. It operates through the Firearms and Castings segments. The Firearms segment focuses on manufacturing and selling rifles, pistols, and revolvers principally to a number of federally licensed, independent wholesale distributors. The Castings segment offers steel investment castings and metal injection molding parts. The company was founded by William B. Ruger in 1949 and is headquartered in Southport, CT.

About Latham Group

Latham Group, Inc. designs, manufactures, and markets in-ground residential swimming pools in North America, Australia, and New Zealand. It offers a portfolio of pools and related products, including in-ground swimming pools that include fiber glass and packaged pools; and pool covers and liners under the Latham, Narellan, CoverStar, Radiant, and GLI brand names. The company was formerly known as Latham Topco, Inc. and changed its name to Latham Group, Inc. in March 2021. Latham Group, Inc. was founded in 1956 and is headquartered in Latham, New York.