Head to Head Review: Smith & Wesson Brands (NASDAQ:SWBI) and Shimano (OTCMKTS:SMNNY)

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

Dividends

Smith & Wesson Brands pays an annual dividend of $0.52 per share and has a dividend yield of 5.4%. Shimano pays an annual dividend of $0.14 per share and has a dividend yield of 1.3%. 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. Shimano pays out 53.8% of its earnings in the form of a dividend. Smith & Wesson Brands has raised its dividend for 4 consecutive years. Smith & Wesson Brands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Smith & Wesson Brands has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, Shimano has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Smith & Wesson Brands and Shimano, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smith & Wesson Brands	0	2	1	0	2.33
Shimano	0	0	0	0	0.00

Smith & Wesson Brands currently has a consensus target price of $12.00, suggesting a potential upside of 23.71%. Given Smith & Wesson Brands’ stronger consensus rating and higher probable upside, equities analysts plainly believe Smith & Wesson Brands is more favorable than Shimano.

Institutional & Insider Ownership

59.3% of Smith & Wesson Brands shares are owned by institutional investors. Comparatively, 0.0% of Shimano shares are owned by institutional investors. 1.6% of Smith & Wesson Brands shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smith & Wesson Brands	$474.66 million	0.91	$13.43 million	$0.24	40.42
Shimano	$2.98 billion	3.29	$503.78 million	$0.26	43.04

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Smith & Wesson Brands	2.34%	3.10%	2.00%
Shimano	7.53%	4.23%	3.89%

Summary

Shimano beats Smith & Wesson Brands on 9 of the 17 factors compared between the two stocks.

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.

About Shimano

Shimano Inc. develops, produces, and distributes bicycle components, fishing tackles, and rowing equipment. It has operations in Japan, Asia, Europe, North America, Latin America, and Oceania. Shimano Inc. was founded in 1921 and is headquartered in Sakai, Japan.