Black Diamond (NASDAQ: BDE) and Callaway Golf (NYSE:ELY) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitabiliy, valuation, institutional ownership, analyst recommendations, risk and dividends.

Earnings & Valuation

This table compares Black Diamond and Callaway Golf’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Black Diamond N/A N/A N/A ($0.21) -33.57
Callaway Golf $906.07 million 1.35 $61.70 million $1.82 7.16

Callaway Golf has higher revenue and earnings than Black Diamond. Black Diamond is trading at a lower price-to-earnings ratio than Callaway Golf, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

44.4% of Black Diamond shares are held by institutional investors. Comparatively, 86.0% of Callaway Golf shares are held by institutional investors. 33.6% of Black Diamond shares are held by company insiders. Comparatively, 2.6% of Callaway Golf shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Callaway Golf pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Black Diamond does not pay a dividend. Callaway Golf pays out 2.2% of its earnings in the form of a dividend.

Profitability

This table compares Black Diamond and Callaway Golf’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Black Diamond -4.24% -0.03% -0.02%
Callaway Golf 18.09% 6.60% 4.89%

Analyst Recommendations

This is a summary of current recommendations and price targets for Black Diamond and Callaway Golf, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Black Diamond 0 0 2 0 3.00
Callaway Golf 0 4 8 0 2.67

Black Diamond currently has a consensus price target of $7.00, indicating a potential downside of 0.71%. Callaway Golf has a consensus price target of $14.55, indicating a potential upside of 11.54%. Given Callaway Golf’s higher probable upside, analysts clearly believe Callaway Golf is more favorable than Black Diamond.

Risk and Volatility

Black Diamond has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, Callaway Golf has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500.

Summary

Callaway Golf beats Black Diamond on 9 of the 13 factors compared between the two stocks.

About Black Diamond

Black Diamond, Inc., through its ownership of Black Diamond Equipment, Ltd., is engaged in designing, manufacturing and marketing of active outdoor performance equipment and apparel for climbing, mountaineering, backpacking, skiing and a range of other year-round outdoor recreation activities. Its principal brands include Black Diamond and PIEPS. It offer a range of products, including apparel, such as jackets, shells, pants and bibs; rock-climbing equipment, such as carabiners, protection devices, harnesses, belay devices, helmets, and ice-climbing gear; technical backpacks and high-end day packs; tents; trekking poles; headlamps and lanterns, and gloves and mittens. The Company also offers advanced skis, ski poles, ski bindings, ski skins, and ski safety products, including avalanche airbag systems, avalanche transceivers, shovels and probes. The Company’s products are sold in North America, Europe, Asia, and the rest of the world in over 50 countries.

About Callaway Golf

Callaway Golf Company designs, manufactures and sells golf clubs, golf balls, golf bags and other golf-related accessories. The Company has two segments: the golf clubs segment and golf balls segment. The golf clubs segment consists of its woods, hybrids, irons and wedges, and Odyssey putters. This segment also includes other golf-related accessories, royalties from licensing of its trademarks and service marks and sales of pre-owned golf clubs. The golf balls segment consists of Callaway Golf and Strata balls that are designed, manufactured and sold by the Company. It sells its products to retailers, directly and through its subsidiaries, and to third-party distributors. It sells pre-owned golf products through its Website, www.callawaygolfpreowned.com. In addition, it sells Callaway Golf and Odyssey products, including Toulon Design by Odyssey, directly to consumers through its Websites, www.callawaygolf.com and www.odysseygolf.com.

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