Dover Saddlery (NASDAQ: DOVR) and Cabela’s (NYSE:CAB) are both cyclical consumer goods & services companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitabiliy, earnings, analyst recommendations, institutional ownership and valuation.

Profitability

This table compares Dover Saddlery and Cabela’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dover Saddlery -3.40% -17.52% -6.75%
Cabela’s 3.49% 8.97% 2.02%

Insider & Institutional Ownership

58.3% of Cabela’s shares are owned by institutional investors. 21.0% of Cabela’s shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Dover Saddlery and Cabela’s’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Dover Saddlery N/A N/A N/A N/A N/A
Cabela’s $4.10 billion 0.98 $468.84 million $2.08 27.92

Cabela’s has higher revenue and earnings than Dover Saddlery.

Analyst Recommendations

This is a summary of recent ratings and price targets for Dover Saddlery and Cabela’s, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dover Saddlery 0 1 0 0 2.00
Cabela’s 0 7 1 0 2.13

Cabela’s has a consensus target price of $64.30, suggesting a potential upside of 10.73%. Given Cabela’s’ stronger consensus rating and higher probable upside, analysts plainly believe Cabela’s is more favorable than Dover Saddlery.

Summary

Cabela’s beats Dover Saddlery on 9 of the 9 factors compared between the two stocks.

About Dover Saddlery

Dover Saddlery, Inc. is a retailer and omni-channel marketer of equestrian products in the United States. The Company sells its products through omni-channel, including direct and retail. The Company offers a range of products required to own, ride, train and compete with a horse. The Company’s equestrian product line includes a range of separate items such as saddles, tack, specialized apparel, footwear, horse clothing, horse health and stable products. As of December 31, 2013, the Company, through its subsidiaries, operates twenty-one retail stores under the Dover Saddlery brand and one retail store under the Smith Brothers brand. It maintains two catalogs. The Dover Saddlery catalog caters to the mid to high-end, English-style, equestrian products customer. The Smith Brothers catalog is aimed at the Western-style, equestrian products customer. The Company offers web-base marketing through its Websites www.doversaddlery.com and www.smithbrothers.com.

About Cabela’s

Cabela’s Incorporated is an omni-channel retailer of hunting, fishing, camping, shooting sports and related outdoor merchandise. The Company offers its customers a selection of national and regional brand products, including its Cabela’s brand. The Company’s segments include Merchandising and Financial Services. The Merchandising segment sells products and services through the Company’s retail stores, its e-commerce Websites (Cabelas.com and Cabelas.ca), and its catalogs. The United States merchandising and Canada merchandising operating segments have been aggregated into its Merchandising segment. The Financial Services segment issues co-branded credit cards, which are available through all of its channels. The Company’s product assortment includes merchandise and equipment for hunting, fishing, marine use, camping, and recreational sport shooting, along with casual and outdoor apparel and footwear, optics, vehicle accessories, and gifts and home furnishings with an outdoor theme.

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