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

Dividends

Sturm, Ruger & pays an annual dividend of $1.92 per share and has a dividend yield of 3.9%. Johnson Outdoors pays an annual dividend of $0.36 per share and has a dividend yield of 0.6%. Sturm, Ruger & pays out 49.0% of its earnings in the form of a dividend. Johnson Outdoors pays out 11.1% 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.

Profitability

This table compares Sturm, Ruger & and Johnson Outdoors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sturm, Ruger & 11.74% 29.70% 22.42%
Johnson Outdoors 6.85% 12.90% 8.53%

Institutional & Insider Ownership

86.9% of Sturm, Ruger & shares are held by institutional investors. Comparatively, 60.4% of Johnson Outdoors shares are held by institutional investors. 3.9% of Sturm, Ruger & shares are held by company insiders. Comparatively, 28.4% of Johnson Outdoors shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Sturm, Ruger & and Johnson Outdoors’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sturm, Ruger & $622.49 million 1.39 $149.13 million $3.92 12.50
Johnson Outdoors $473.75 million 1.14 $51.51 million $3.23 18.98

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Sturm, Ruger & and Johnson Outdoors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sturm, Ruger & 0 2 0 0 2.00
Johnson Outdoors 0 0 2 0 3.00

Sturm, Ruger & presently has a consensus target price of $53.50, indicating a potential upside of 9.18%. Johnson Outdoors has a consensus target price of $46.50, indicating a potential downside of 24.16%. Given Sturm, Ruger &’s higher probable upside, analysts clearly believe Sturm, Ruger & is more favorable than Johnson Outdoors.

Summary

Sturm, Ruger & beats Johnson Outdoors on 10 of the 15 factors compared between the two stocks.

Sturm, Ruger & Company Profile

Sturm, Ruger & Company, Inc. is engaged in the design, manufacture, and sale of firearms to domestic customers. The Company operates through two segments: firearms and castings. The firearms segment manufactures and sells rifles, pistols, and revolvers principally to a range of federally licensed, independent wholesale distributors primarily located in the United States. The castings segment manufactures and sells steel investment castings and metal injection molding (MIM) parts. The Company’s design and manufacturing operations are located in the United States. The Company primarily offers products in three industry product categories: rifles, pistols, and revolvers. The Company’s firearms are sold through independent wholesale distributors, principally to the commercial sporting market. The Company manufactures firearm products under the Ruger name. The Company also manufactures and sells accessories and replacement parts for its firearms.

Johnson Outdoors Company Profile

Johnson Outdoors Inc. is a manufacturer and marketer of branded seasonal, outdoor recreation products. The Company operates through four segments: Marine Electronics, Outdoor Equipment, Watercraft and Diving. Its Marine Electronics segment’s brands are Minn Kota, Humminbird and Cannon. Its Outdoor Equipment segment’s brands are Eureka!, Jetboil and Silva. Its Watercraft segment designs and markets Necky sea touring kayaks; sit on top Ocean Kayaks, and Old Town canoes and kayaks for family recreation, touring, angling and tripping. The Company manufactures and markets underwater diving products for recreational divers, which it sells and distributes under the SCUBAPRO brand name. It markets a line of underwater diving and snorkeling equipment, including regulators, buoyancy compensators, dive computers and gauges, wetsuits, masks, fins, snorkels and accessories. The Company’s products are used for fishing from a boat, diving, paddling, hiking and camping.

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