Callaway Golf (NYSE: ELY) and Black Diamond (NASDAQ:CLAR) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, risk and profitability.

Volatility & Risk

Callaway Golf has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, Black Diamond has a beta of 1.46, suggesting that its stock price is 46% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Callaway Golf and Black Diamond, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Callaway Golf 0 4 9 0 2.69
Black Diamond 0 1 0 0 2.00

Callaway Golf presently has a consensus target price of $15.56, suggesting a potential upside of 9.83%. Black Diamond has a consensus target price of $7.00, suggesting a potential upside of Infinity. Given Black Diamond’s higher probable upside, analysts plainly believe Black Diamond is more favorable than Callaway Golf.

Profitability

This table compares Callaway Golf and Black Diamond’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Callaway Golf 17.97% 7.88% 5.83%
Black Diamond -4.51% -0.72% -0.57%

Dividends

Callaway Golf pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Black Diamond does not pay a dividend. Callaway Golf pays out 2.1% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Callaway Golf and Black Diamond’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Callaway Golf $871.19 million 1.53 $189.90 million $1.91 7.42
Black Diamond $148.19 million 0.00 -$8.97 million ($0.23) N/A

Callaway Golf has higher revenue and earnings than Black Diamond. Black Diamond is trading at a lower price-to-earnings ratio than Callaway Golf, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

89.0% of Callaway Golf shares are owned by institutional investors. Comparatively, 47.7% of Black Diamond shares are owned by institutional investors. 2.6% of Callaway Golf shares are owned by insiders. Comparatively, 46.8% of Black Diamond shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Callaway Golf beats Black Diamond on 10 of the 14 factors compared between the two stocks.

About Callaway Golf

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.

About Black Diamond

Clarus Corporation, formerly Black Diamond, Inc., through its ownership of Black Diamond Equipment, Ltd., is engaged in designing, manufacturing and marketing of active outdoor performance equipment and apparel for climbing, mountaineering, backpacking, skiing and a range of other year-round outdoor recreation activities. Its principal brands include Black Diamond and PIEPS. It offer a range of products, including apparel, such as jackets, shells, pants and bibs; rock-climbing equipment, such as carabiners, protection devices, harnesses, belay devices, helmets, and ice-climbing gear; technical backpacks and high-end day packs; tents; trekking poles; headlamps and lanterns, and gloves and mittens. The Company also offers advanced skis, ski poles, ski bindings, ski skins, and ski safety products, including avalanche airbag systems, avalanche transceivers, shovels and probes. The Company’s products are sold in North America, Europe, Asia, and the rest of the world in over 50 countries.

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