Reviewing Rocky Brands (NASDAQ:RCKY) and NIKE (NYSE:NKE)

NIKE (NYSE:NKE) and Rocky Brands (NASDAQ:RCKY) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, risk, earnings, institutional ownership, analyst recommendations and valuation.

Dividends

NIKE pays an annual dividend of $1.60 per share and has a dividend yield of 2.0%. Rocky Brands pays an annual dividend of $0.62 per share and has a dividend yield of 2.3%. NIKE pays out 74.1% of its earnings in the form of a dividend. Rocky Brands pays out 25.0% 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. NIKE has increased its dividend for 22 consecutive years. Rocky Brands is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

64.3% of NIKE shares are held by institutional investors. Comparatively, 75.1% of Rocky Brands shares are held by institutional investors. 0.8% of NIKE shares are held by company insiders. Comparatively, 5.1% of Rocky Brands shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for NIKE and Rocky Brands, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NIKE	0	12	17	3	2.72
Rocky Brands	0	1	0	0	2.00

NIKE presently has a consensus price target of $78.2222, suggesting a potential downside of 1.16%. Rocky Brands has a consensus price target of $30.00, suggesting a potential upside of 9.49%. Given Rocky Brands’ higher possible upside, analysts plainly believe Rocky Brands is more favorable than NIKE.

Volatility and Risk

NIKE has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500. Comparatively, Rocky Brands has a beta of 2.35, indicating that its stock price is 135% more volatile than the S&P 500.

Earnings & Valuation

This table compares NIKE and Rocky Brands”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NIKE	$46.31 billion	2.52	$3.22 billion	$2.16	36.64
Rocky Brands	$453.77 million	0.45	$11.39 million	$2.48	11.05

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

Profitability

This table compares NIKE and Rocky Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NIKE	6.95%	23.33%	8.57%
Rocky Brands	4.03%	10.41%	5.21%

Summary

NIKE beats Rocky Brands on 11 of the 18 factors compared between the two stocks.

About NIKE

NIKE, Inc., together with its subsidiaries, designs, develops, markets, and sells athletic footwear, apparel, equipment, accessories, and services worldwide. The company provides athletic and casual footwear, apparel, and accessories under the Jumpman trademark; and casual sneakers, apparel, and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron, and Jack Purcell trademarks. It also sells a line of performance equipment and accessories comprising bags, sport balls, socks, eyewear, timepieces, digital devices, bats, gloves, protective equipment, and other equipment for sports activities under the NIKE brand; and various plastic products to other manufacturers. In addition, the company markets apparel with licensed college and professional team, and league logos, as well as sells sports apparel; and licenses unaffiliated parties to manufacture and sell apparel, digital devices, and applications and other equipment for sports activities under NIKE-owned trademarks. It sells its products to footwear stores; sporting goods stores; athletic specialty stores; department stores; skate, tennis, and golf shops; and other retail accounts through NIKE-owned retail stores, digital platforms, independent distributors, licensees, and sales representatives. NIKE, Inc. was founded in 1964 and is headquartered in Beaverton, Oregon.

About Rocky Brands

Rocky Brands, Inc. designs, manufactures, and markets footwear and apparel in the United States, Canada, and internationally. It operates through Wholesale, Retail, and Contract Manufacturing segments. The Wholesale segment offers products, which includes sporting goods stores, outdoor retailers, independent shoe retailers, hardware stores, catalogs, mass merchants, uniform stores, farm store chains, specialty safety stores, specialty retailers, and online retailers in retail locations through a range of distribution channels. Retail segment sells its products directly to consumers through its websites comprising rockyboots.com, georgiaboot.com, durangoboot.com, muckbootcompany.com, xtratuf.com, lehighoutfitters.com, lehighsafetyshoes.com, and slipgrips.com; and third-party marketplaces and Rocky Outdoor Gear Stores. The Contract Manufacturing segment include private label sales and any sales to customers which are contracted to manufacture a specific footwear product for a customer and include sales to the U.S. Military. In addition, it serves industrial and construction workers, as well as workers in the hospitality industry, such as restaurants or hotels; farmers and ranchers; western; commercial military personnel; hunting, fishing, camping, and hiking enthusiasts; law enforcement, security personnel, and postal employees; and for the U.S. military personnel. The company sells its products under the Rocky, Georgia Boot, Durango, Lehigh, Muck, XTRATUF, Servus, Ranger, and Michelin brand names Rocky Brands, Inc. was formerly known as William Brooks Shoe Co. The company was founded in 1932 and is headquartered in Nelsonville, Ohio.