Summer Infant (SUMR) versus Daktronics (DAKT) Critical Contrast

Summer Infant (NASDAQ: SUMR) and Daktronics (NASDAQ:DAKT) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Institutional & Insider Ownership

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51.6% of Summer Infant shares are owned by institutional investors. Comparatively, 56.1% of Daktronics shares are owned by institutional investors. 3.3% of Summer Infant shares are owned by insiders. Comparatively, 8.2% of Daktronics shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Summer Infant and Daktronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Summer Infant -1.18% 8.20% 1.23%
Daktronics 1.67% 7.11% 3.97%

Valuation and Earnings

This table compares Summer Infant and Daktronics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Summer Infant $189.87 million 0.11 -$2.24 million $0.07 16.57
Daktronics $586.54 million 0.68 $10.34 million $0.23 39.13

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

Volatility & Risk

Summer Infant has a beta of -0.4, meaning that its stock price is 140% less volatile than the S&P 500. Comparatively, Daktronics has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500.

Dividends

Daktronics pays an annual dividend of $0.28 per share and has a dividend yield of 3.1%. Summer Infant does not pay a dividend. Daktronics pays out 121.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Summer Infant and Daktronics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Summer Infant 0 0 3 0 3.00
Daktronics 0 1 0 0 2.00

Summer Infant presently has a consensus price target of $2.75, suggesting a potential upside of 137.07%. Daktronics has a consensus price target of $10.00, suggesting a potential upside of 11.11%. Given Summer Infant’s stronger consensus rating and higher possible upside, research analysts clearly believe Summer Infant is more favorable than Daktronics.

Summary

Daktronics beats Summer Infant on 11 of the 16 factors compared between the two stocks.

Summer Infant Company Profile

Summer Infant, Inc. is an infant and juvenile products company. The Company is engaged in the juvenile industry, providing mothers and caregivers a range of products to care for babies and toddlers. As of December 31, 2016, it marketed over 1,100 products in several product categories, including monitoring, safety, nursery, baby gear and feeding products. It markets its products, under its Summer Infant, SwaddleMe and Born Free brand names. Its anchor products in its product categories include monitoring, such as wireless fidelity (Wi-Fi)/Internet, video, audio and prenatal; safety, including gates, bath, potties, boosters and positioners; nursery, such as swaddle, travel accessories, safe sleep, soothers and sleep aides; baby gear, including strollers, bassinets, high chairs and playards, and feeding products, such as bottles, drinking cups, bibs and placemats, electronics and pacifiers. It sells its products across the globe to national retailers, as well as independent retailers.

Daktronics Company Profile

Daktronics, Inc. designs, manufactures, and sells a range of electronic display systems and related products worldwide. It operates through five segments: Commercial, Live Events, High School Park and Recreation, Transportation, and International. The company offers video display systems, such as displays to show various levels of video, graphics, and animation, as well as controllers; LED ribbon board displays; mobile and modular display systems; freeform LED displays, which include architectural lighting and display products; indoor and outdoor scoreboards for various sports, digit displays, scoring and timing controllers, statistics software, and other related products; and timing systems for sports events primarily aquatics and track competitions, as well as swimming touchpads, race start systems, and relay take-off platforms. It also provides message displays; ITS dynamic message signs, including LED displays for road management, mass transit, and aviation applications; digit and directional displays for use in parking facilities; and audio systems for outdoor sports venues. In addition, the company offers digital billboards and street furniture displays used to display static images, which change at regular intervals for the out-of-home (OOH) advertising industry; Visiconn system and Venus Control Suite, a software application for controlling content and playback loops for digital billboard applications; and street furniture comprising advertising light boxes for digital OOH campaigns. Further, it provides digit and price displays, such as outdoor time and temperature displays, as well as Fuelight digit displays for the petroleum industry; and dynamic messaging systems for retailers, convenience stores, and other businesses, as well as maintenance and professional services related to its products. The company sells its products through direct sales and resellers. Daktronics, Inc. was founded in 1968 and is based in Brookings, South Dakota.

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