WD-40 (NASDAQ:WDFC) & Spectrum Brands (NYSE:SPB) Critical Contrast

Spectrum Brands (NYSE:SPB) and WD-40 (NASDAQ:WDFC) are both mid-cap consumer staples companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, risk, valuation and profitability.

Institutional and Insider Ownership

91.5% of WD-40 shares are owned by institutional investors. 4.5% of Spectrum Brands shares are owned by company insiders. Comparatively, 0.8% of WD-40 shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Spectrum Brands and WD-40″s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spectrum Brands	$2.81 billion	0.72	$99.70 million	$3.28	26.84
WD-40	$619.98 million	4.76	$90.99 million	$6.58	33.41

Spectrum Brands has higher revenue and earnings than WD-40. Spectrum Brands is trading at a lower price-to-earnings ratio than WD-40, indicating that it is currently the more affordable of the two stocks.

Dividends

Spectrum Brands pays an annual dividend of $1.88 per share and has a dividend yield of 2.1%. WD-40 pays an annual dividend of $4.08 per share and has a dividend yield of 1.9%. Spectrum Brands pays out 57.3% of its earnings in the form of a dividend. WD-40 pays out 62.0% 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. Spectrum Brands has raised its dividend for 1 consecutive years and WD-40 has raised its dividend for 17 consecutive years. Spectrum Brands is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current recommendations for Spectrum Brands and WD-40, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spectrum Brands	0	4	3	0	2.43
WD-40	0	2	2	2	3.00

Spectrum Brands currently has a consensus target price of $98.83, suggesting a potential upside of 12.25%. WD-40 has a consensus target price of $305.00, suggesting a potential upside of 38.76%. Given WD-40’s stronger consensus rating and higher possible upside, analysts clearly believe WD-40 is more favorable than Spectrum Brands.

Profitability

This table compares Spectrum Brands and WD-40’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Spectrum Brands	2.76%	10.06%	5.49%
WD-40	13.23%	33.53%	18.97%

Volatility and Risk

Spectrum Brands has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500. Comparatively, WD-40 has a beta of 0.27, suggesting that its stock price is 73% less volatile than the S&P 500.

Summary

WD-40 beats Spectrum Brands on 11 of the 18 factors compared between the two stocks.

About Spectrum Brands

Spectrum Brands Holdings, Inc. operates as a branded consumer products and home essentials company in North America, Europe, the Middle East, Africa, and Asia-Pacific regions. It operates through three segments: Home and Personal Care; Global Pet Care; and Home and Garden. The Home and Personal Care segment provides home appliances under the Black & Decker, Russell Hobbs, George Foreman, PowerXL, Emeril Legasse, Copper Chef, Toastmaster, Juiceman, Farberware, and Breadman brands; and personal care products under the Remington brand. The Global Pet Care segment provides dog and cat chews, treats, wet and dry foods, dog and cat clean-up and food, training, health and grooming, indoor birds, and small animal food and care products under the Good'n'Fun, DreamBone, GOOD BOY, SmartBones, IAMS, EUKANUBA, Nature's Miracle, FURminator, Dingo, 8IN1, Meowee!, and Wild Harvest brands. This segment also offers aquarium kits, stand-alone tanks, and aquatics equipment and consumables under the Tetra, Marineland, Instant Ocean, GloFish, and OmegaSea brands. The Home and Garden segment provides outdoor insect and weed control solutions, and animal repellents under the Spectracide, Garden Safe, Liquid Fence, and EcoLogic brands; household pest control solutions under the Hot Shot, Black Flag, Real-Kill, Ultra Kill, The Ant Trap, and Rid-A-Bug brand names; household surface cleaning, maintenance, and restoration products, including bottled liquids, mops, wipes, and markers under the Rejuvenate brand name; and personal-use pesticides and insect repellent products under the Cutter and Repel brands. The company sells its products through retailers, e-commerce and online retailers, wholesalers, and distributors. Spectrum Brands Holdings, Inc. was founded in 1906 and is headquartered in Middleton, Wisconsin.

About WD-40

WD-40 Company develops and sells maintenance products, and homecare and cleaning products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company provides multi-purpose maintenance products that include aerosol sprays, non-aerosol trigger sprays, precision pens, and in liquid-bulk form products under the WD-40 Multi-Use brand name; specialty maintenance products, such as penetrants, degreasers, corrosion inhibitors, greases, lubricants, and rust removers under the WD-40 Specialist brand; and bike-specific products. It also offers multi-purpose and specialty drip oils, and spray lubricant products, as well as other specialty maintenance products under the 3-IN-ONE brand name; and professional spray maintenance products and lubricants for the bike maintenance market under the GT85 brand name. In addition, the company provides automatic toilet bowl cleaners under the 2000 Flushes brand name; aerosol and liquid trigger carpet stain and odor eliminators under the Spot Shot brand; room and rug deodorizers under the Carpet Fresh brand name; carpet and household cleaners, and rug and room deodorizers under the 1001 brand; heavy-duty hand cleaner products under the Lava brand name in the United States, as well as under the Solvol brand name in Australia; and automatic toilet bowl cleaners under the X-14 brand name. It sells its products primarily through warehouse club stores, hardware stores, automotive parts outlets, industrial distributors and suppliers, mass retail and home center stores, value retailers, grocery stores, online retailers, farm supply, sport retailers, and independent bike dealers. WD-40 Company was founded in 1953 and is headquartered in San Diego, California.