Critical Survey: Sturm, Ruger & Company, Inc. (NYSE:RGR) and Academy Sports and Outdoors (NASDAQ:ASO)

Sturm, Ruger & Company, Inc. (NYSE:RGR) and Academy Sports and Outdoors (NASDAQ:ASO) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, dividends and risk.

Profitability

This table compares Sturm, Ruger & Company, Inc. and Academy Sports and Outdoors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sturm, Ruger & Company, Inc.	1.07%	9.53%	7.98%
Academy Sports and Outdoors	6.21%	18.47%	7.21%

Dividends

Sturm, Ruger & Company, Inc. pays an annual dividend of $0.64 per share and has a dividend yield of 1.6%. Academy Sports and Outdoors pays an annual dividend of $0.52 per share and has a dividend yield of 1.1%. Sturm, Ruger & Company, Inc. pays out 206.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Academy Sports and Outdoors pays out 9.7% of its earnings in the form of a dividend. Academy Sports and Outdoors has raised its dividend for 3 consecutive years.

Risk & Volatility

Sturm, Ruger & Company, Inc. has a beta of 0.1, suggesting that its share price is 90% less volatile than the S&P 500. Comparatively, Academy Sports and Outdoors has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500.

Institutional & Insider Ownership

64.0% of Sturm, Ruger & Company, Inc. shares are held by institutional investors. 4.6% of Sturm, Ruger & Company, Inc. shares are held by company insiders. Comparatively, 3.6% of Academy Sports and Outdoors shares are held 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.

Analyst Recommendations

This is a summary of recent ratings and price targets for Sturm, Ruger & Company, Inc. and Academy Sports and Outdoors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sturm, Ruger & Company, Inc.	0	0	0	0	0.00
Academy Sports and Outdoors	0	9	9	0	2.50

Academy Sports and Outdoors has a consensus price target of $58.78, indicating a potential upside of 22.94%. Given Academy Sports and Outdoors’ stronger consensus rating and higher possible upside, analysts clearly believe Academy Sports and Outdoors is more favorable than Sturm, Ruger & Company, Inc..

Valuation & Earnings

This table compares Sturm, Ruger & Company, Inc. and Academy Sports and Outdoors”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sturm, Ruger & Company, Inc.	$535.64 million	1.20	$30.56 million	$0.31	128.42
Academy Sports and Outdoors	$5.93 billion	0.54	$418.45 million	$5.34	8.95

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

Summary

Academy Sports and Outdoors beats Sturm, Ruger & Company, Inc. on 11 of the 17 factors compared between the two stocks.

About Sturm, Ruger & Company, Inc.

Sturm, Ruger & Co., Inc. engages in the business of designing, manufacturing, and selling firearms to domestic customers. It operates through the Firearms and Castings segments. The Firearms segment focuses on manufacturing and selling rifles, pistols, and revolvers principally to a number of federally licensed, independent wholesale distributors. The Castings segment offers steel investment castings and metal injection molding parts. The company was founded by William B. Ruger in 1949 and is headquartered in Southport, CT.

About Academy Sports and Outdoors

Academy Sports and Outdoors, Inc., through its subsidiaries, operates as a sporting goods and outdoor recreational retailer in the United States. The company outdoor division comprises camping products, such as coolers and drinkware, and camping accessories and equipment,; fishing products, including marine equipment and fishing rods, reels, and baits and equipment; and hunting products, which includes firearms, ammunition, archery and archery equipment, camouflage apparel, waders, shooting accessories, gun safes, optics, airguns, and hunting equipment. Its sports and recreation division offers fitness equipment, fitness accessories, and nutrition supplies; team and specialty sports equipment, including baseball, football, basketball, soccer, golf, racket sports, volleyball, backpacks, and sports bags; recreation products, which includes patio furniture, outdoor cooking, trampolines, play sets, watersports, and pet equipment, as well as wheeled goods including bicycles, skateboards, and other ride-on toys; and electronics and watches, as well as front-end products, such as consumables, batteries, etc. The company's apparel division provides outdoor and seasonal apparel, denim, work apparel, graphic t-shirts, and accessories; boys and girls outdoor, and athletic apparel; sporting and fitness apparel; and professional and collegiate team licensed apparel and accessories. Its footwear division offers casual shoes, slippers, seasonal footwear, and socks; work and western boots, shoes, and hunting footwear; boys and girls footwear; athletic footwear, such as running shoes, athletic lifestyle, and training shoes; and team and specialty sports footwear, and slides. The company sells its products under the Academy Sports + Outdoors, Magellan Outdoors, BCG, O'rageous, Game Winner, Outdoor Gourmet, and Freely brand names. Academy Sports and Outdoors, Inc. was founded in 1938 and is headquartered in Katy, Texas.