Smith & Wesson Brands (NASDAQ:SWBI) vs. Pool (NASDAQ:POOL) Financial Comparison

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

Insider & Institutional Ownership

99.0% of Pool shares are held by institutional investors. Comparatively, 59.3% of Smith & Wesson Brands shares are held by institutional investors. 3.0% of Pool shares are held by company insiders. Comparatively, 1.6% of Smith & Wesson Brands shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Pool and Smith & Wesson Brands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pool	1	7	3	0	2.18
Smith & Wesson Brands	1	2	1	0	2.00

Pool presently has a consensus price target of $337.86, suggesting a potential upside of 34.76%. Smith & Wesson Brands has a consensus price target of $12.00, suggesting a potential upside of 40.27%. Given Smith & Wesson Brands’ higher probable upside, analysts plainly believe Smith & Wesson Brands is more favorable than Pool.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Pool	7.77%	31.40%	11.43%
Smith & Wesson Brands	2.34%	3.10%	2.00%

Valuation & Earnings

This table compares Pool and Smith & Wesson Brands”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pool	$5.29 billion	1.76	$434.33 million	$10.97	22.85
Smith & Wesson Brands	$471.40 million	0.80	$13.43 million	$0.24	35.65

Pool has higher revenue and earnings than Smith & Wesson Brands. Pool 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.

Dividends

Pool pays an annual dividend of $5.00 per share and has a dividend yield of 2.0%. Smith & Wesson Brands pays an annual dividend of $0.52 per share and has a dividend yield of 6.1%. Pool pays out 45.6% of its earnings in the form of a dividend. Smith & Wesson Brands pays out 216.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pool has raised its dividend for 15 consecutive years and Smith & Wesson Brands has raised its dividend for 4 consecutive years.

Volatility & Risk

Pool has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, Smith & Wesson Brands has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.

Summary

Pool beats Smith & Wesson Brands on 14 of the 17 factors compared between the two stocks.

About Pool

Pool Corporation distributes swimming pool supplies, equipment, and related leisure products in the United States and internationally. The company offers maintenance products, including chemicals, supplies, and pool accessories; repair and replacement parts for pool equipment, such as cleaners, filters, heaters, pumps, and lights; and building materials, such as concrete, plumbing and electrical components, functional and decorative pool surfaces, decking materials, tiles, hardscapes, and natural stones for pool installations and remodeling. It also provides pool equipment and components for new pool construction and the remodeling of existing pools; irrigation and related products, such as irrigation system components, and professional turf care equipment and supplies; commercial products, including heaters, safety equipment, commercial decking equipment, and commercial pumps and filters. In addition, the company offers fiberglass pools, and hot tubs and packaged pool kits comprising walls, liners, braces, and coping for in-ground and above-ground pools; and other pool construction and recreational products comprising discretionary recreational and related outdoor living products, such as grills and components for outdoor kitchens. It serves swimming pool remodelers and builders; specialty retailers that sell swimming pool supplies; swimming pool repair and service businesses; irrigation construction and landscape maintenance contractors; and commercial pool operators and pool contractors. Pool Corporation was incorporated in 1993 and is headquartered in Covington, Louisiana.

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.