Hibbett Sports (NASDAQ: HIBB) and Sportsman’s Warehouse Holdings (NASDAQ:SPWH) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitabiliy, earnings, dividends, valuation and analyst recommendations.

Profitability

This table compares Hibbett Sports and Sportsman’s Warehouse Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hibbett Sports 5.59% 16.39% 11.67%
Sportsman’s Warehouse Holdings 3.16% 127.68% 6.82%

Analyst Ratings

This is a breakdown of recent ratings for Hibbett Sports and Sportsman’s Warehouse Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hibbett Sports 1 13 2 0 2.06
Sportsman’s Warehouse Holdings 0 3 3 0 2.50

Hibbett Sports presently has a consensus price target of $31.57, indicating a potential upside of 58.25%. Sportsman’s Warehouse Holdings has a consensus price target of $6.92, indicating a potential upside of 41.73%. Given Hibbett Sports’ higher probable upside, research analysts plainly believe Hibbett Sports is more favorable than Sportsman’s Warehouse Holdings.

Institutional and Insider Ownership

79.7% of Sportsman’s Warehouse Holdings shares are owned by institutional investors. 1.6% of Hibbett Sports shares are owned by company insiders. Comparatively, 3.6% of Sportsman’s Warehouse Holdings shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Hibbett Sports and Sportsman’s Warehouse Holdings’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hibbett Sports $966.56 million 0.43 $106.75 million $2.46 8.11
Sportsman’s Warehouse Holdings $785.24 million 0.26 $69.35 million $0.59 8.27

Hibbett Sports has higher revenue and earnings than Sportsman’s Warehouse Holdings. Hibbett Sports is trading at a lower price-to-earnings ratio than Sportsman’s Warehouse Holdings, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Hibbett Sports has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, Sportsman’s Warehouse Holdings has a beta of -0.79, meaning that its stock price is 179% less volatile than the S&P 500.

Summary

Hibbett Sports beats Sportsman’s Warehouse Holdings on 8 of the 14 factors compared between the two stocks.

About Hibbett Sports

Hibbett Sports, Inc. operates athletic specialty stores in small and mid-sized markets in the South, Southwest, Mid-Atlantic and the Midwest regions of the United States. As of January 28, 2017, the Company had operated 1,078 stores consisting of 1,059 Hibbett Sports stores and 19 smaller-format Sports Additions athletic shoe stores in 35 states. Its primary retail format is Hibbett Sports, which is an approximately 5,000 square foot store. Hibbett Sports stores offer a merchandising mix of localized apparel, footwear, equipment and accessories designed to appeal to a range of customers within each market. Its 19 Sports Additions stores are enclosed mall-based stores, averaging 2,500 square feet with approximately 90% of merchandise consisting of athletic footwear and the remainder consisting of caps and a limited assortment of apparel. Hibbett Team Sales, Inc., a subsidiary of the Company, is a supplier of customized athletic apparel, equipment and footwear.

About Sportsman’s Warehouse Holdings

Sportsman’s Warehouse Holdings, Inc. is an outdoor sporting goods retailer. The Company has outdoor specialty store base in the Western United States and Alaska. The Company has over 70 stores across approximately 20 states, which are located in power, neighborhood and lifestyle centers. The Company also operates several single-unit, standalone locations. Its stores average approximately 44,000 gross square feet. Its stores include locally relevant features, such as a fishing board at the entrance that displays fishing conditions in local lakes and rivers with coordinating gear in end-cap displays in the fishing aisles. The Company engages its customers through in-store features, such as the Braggin Board, various contests (such as Bucks & Bulls and Fish Alaska), and customer-owned taxidermy displays on the walls. It also hosts in-store programs, such as ladies night and a range of instructional seminars, from Dutch oven cooking to choosing the right binocular.

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