Contrasting Sturm Ruger & Co (RGR) & American Outdoor Brands (AOBC)

Sturm Ruger & Co (NYSE: RGR) and American Outdoor Brands (NASDAQ:AOBC) are both small-cap consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, profitability, dividends, analyst recommendations, risk, valuation and institutional ownership.

Profitability

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This table compares Sturm Ruger & Co and American Outdoor Brands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sturm Ruger & Co 9.98% 22.81% 17.95%
American Outdoor Brands 6.05% 11.05% 5.59%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Sturm Ruger & Co and American Outdoor Brands, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sturm Ruger & Co 0 2 1 0 2.33
American Outdoor Brands 0 3 5 1 2.78

Sturm Ruger & Co currently has a consensus target price of $64.50, indicating a potential upside of 16.32%. American Outdoor Brands has a consensus target price of $17.63, indicating a potential upside of 59.50%. Given American Outdoor Brands’ stronger consensus rating and higher possible upside, analysts clearly believe American Outdoor Brands is more favorable than Sturm Ruger & Co.

Dividends

Sturm Ruger & Co pays an annual dividend of $0.92 per share and has a dividend yield of 1.7%. American Outdoor Brands does not pay a dividend. Sturm Ruger & Co pays out 31.9% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Sturm Ruger & Co and American Outdoor Brands’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sturm Ruger & Co $522.26 million 1.85 $52.14 million $2.88 19.25
American Outdoor Brands $903.19 million 0.66 $127.85 million $2.58 4.28

American Outdoor Brands has higher revenue and earnings than Sturm Ruger & Co. American Outdoor Brands is trading at a lower price-to-earnings ratio than Sturm Ruger & Co, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Sturm Ruger & Co has a beta of -0.02, meaning that its stock price is 102% less volatile than the S&P 500. Comparatively, American Outdoor Brands has a beta of -0.04, meaning that its stock price is 104% less volatile than the S&P 500.

Insider & Institutional Ownership

88.5% of Sturm Ruger & Co shares are owned by institutional investors. Comparatively, 74.9% of American Outdoor Brands shares are owned by institutional investors. 4.6% of Sturm Ruger & Co shares are owned by company insiders. Comparatively, 2.3% of American Outdoor Brands shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Sturm Ruger & Co beats American Outdoor Brands on 10 of the 17 factors compared between the two stocks.

Sturm Ruger & Co Company Profile

Sturm, Ruger & Company, Inc. designs, manufactures, and sells firearms under the Ruger name and trademark in the United States. It operates in two segments, Firearms and Castings. The company offers single-shot, autoloading, bolt-action, and sporting rifles; rimfire and centerfire autoloading pistols; single-action and double-action revolvers; and firearms accessories and replacement parts. It also manufactures and sells steel investment castings and metal injection molding (MIM) parts. The company sells its firearm products through independent wholesale distributors principally to the commercial sporting market; and castings and MIM parts directly or through manufacturers' representatives. The company also exports its firearm products through a network of commercial distributors and directly to foreign customers comprising primarily of law enforcement agencies and foreign governments. Sturm, Ruger & Company, Inc. was founded in 1949 and is headquartered in Southport, Connecticut.

American Outdoor Brands Company Profile

American Outdoor Brands Corp. manufactures firearms. Its products include handguns, long guns, handcuffs and firearm-related products and accessories for sale to a wide variety of customers, including gun enthusiasts, collectors, hunters, sportsmen, competitive shooters, individuals desiring home and personal protection, law enforcement and security agencies and officers and military agencies in the United States and throughout the world. It sells its products under the Smith & Wesson, M&P, Thompson and Center Arms brands. The company was founded by Michell A. Saltz on June 17, 1991 and is headquartered in Springfield, MA.

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