Pool (NASDAQ:POOL) and Topgolf Callaway Brands (NYSE:MODG) Critical Survey

Pool (NASDAQ:POOL) and Topgolf Callaway Brands (NYSE:MODG) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, earnings, risk and dividends.

Profitability

This table compares Pool and Topgolf Callaway Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pool	7.79%	30.99%	11.51%
Topgolf Callaway Brands	-36.08%	0.37%	0.13%

Risk & Volatility

Pool has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Topgolf Callaway Brands has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Pool and Topgolf Callaway Brands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pool	0	5	2	0	2.29
Topgolf Callaway Brands	1	7	3	0	2.18

Pool presently has a consensus target price of $342.1429, suggesting a potential upside of 11.93%. Topgolf Callaway Brands has a consensus target price of $9.75, suggesting a potential upside of 13.50%. Given Topgolf Callaway Brands’ higher probable upside, analysts clearly believe Topgolf Callaway Brands is more favorable than Pool.

Institutional and Insider Ownership

99.0% of Pool shares are owned by institutional investors. Comparatively, 84.7% of Topgolf Callaway Brands shares are owned by institutional investors. 3.0% of Pool shares are owned by company insiders. Comparatively, 2.4% of Topgolf Callaway Brands shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Pool and Topgolf Callaway Brands”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pool	$5.28 billion	2.16	$434.33 million	$10.84	28.20
Topgolf Callaway Brands	$4.24 billion	0.37	-$1.45 billion	($8.13)	-1.06

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

Summary

Pool beats Topgolf Callaway Brands on 11 of the 14 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 Topgolf Callaway Brands

Topgolf Callaway Brands Corp. designs, manufactures, and sells golf equipment, golf and lifestyle apparel, and other accessories in the United States, Europe, Asia, and Internationally. The Topgolf segment operates Topgolf venues equipped with technology-enabled hitting bays, bars, dining areas, and event spaces, as well as Toptracer ball-flight tracking technology; and World Golf Tour digital golf game. The Golf Equipment segment provides drivers, fairway woods, hybrids, irons, wedges and packaged sets, putters, and pre-owned golf clubs under the Callaway and Odyssey brands, as well as golf balls under the Callaway Golf and Strata brands. The Active Lifestyle segment offers golf apparel and footwear; golf accessories, including golf bags, golf gloves, headwear, and practice aids under the Callaway brand; golf and lifestyle apparel, hats, luggage, and accessories under the TravisMathew brand; and footwear, belts, hats, facemasks, sunglasses, socks, and underwear under the Cuater by TravisMathew brand. This segment also provides storage and travel gear for sport and personal use, such as backpacks; travel, duffel, and golf bags; and storage gear accessories, as well as outerwear, headwear, and accessories under the OGIO brand. In addition, it offers outdoor apparel comprising jackets, trousers, dresses, skirts, and tops; and footwear and outdoor equipment, including packs and bags, travel bags, tents, sleeping bags, and accessories under the Jack Wolfskin brand. The company sells its products through golf retailers, sporting goods retailers, online retailers, mass merchants, department stores, third-party distributors, and mail order stores, as well as directly to consumers through its retail stores and websites. The company was formerly known as Callaway Golf Company and changed its name to Topgolf Callaway Brands Corp. in September 2022. Topgolf Callaway Brands Corp. was incorporated in 1982 and is headquartered in Carlsbad, California.