Rocky Brands (NASDAQ: RCKY) and Weyco Group (NASDAQ:WEYS) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, profitabiliy, institutional ownership, risk, earnings, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Rocky Brands and Weyco Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rocky Brands 0 2 0 0 2.00
Weyco Group 0 1 0 0 2.00

Rocky Brands currently has a consensus price target of $12.00, suggesting a potential downside of 12.09%. Weyco Group has a consensus price target of $26.00, suggesting a potential downside of 3.20%. Given Weyco Group’s higher probable upside, analysts clearly believe Weyco Group is more favorable than Rocky Brands.

Profitability

This table compares Rocky Brands and Weyco Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rocky Brands 1.06% 4.03% 2.94%
Weyco Group 5.65% 6.91% 5.36%

Institutional and Insider Ownership

53.3% of Rocky Brands shares are held by institutional investors. Comparatively, 32.3% of Weyco Group shares are held by institutional investors. 8.5% of Rocky Brands shares are held by company insiders. Comparatively, 42.8% of Weyco Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Rocky Brands pays an annual dividend of $0.44 per share and has a dividend yield of 3.2%. Weyco Group pays an annual dividend of $0.88 per share and has a dividend yield of 3.3%. Rocky Brands pays out 118.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Weyco Group pays out 56.8% of its earnings in the form of a dividend. Weyco Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Rocky Brands and Weyco Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rocky Brands $261.70 million 0.39 $16.11 million $0.37 36.89
Weyco Group $287.74 million 0.97 $26.44 million $1.55 17.33

Weyco Group has higher revenue and earnings than Rocky Brands. Weyco Group is trading at a lower price-to-earnings ratio than Rocky Brands, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Rocky Brands has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500. Comparatively, Weyco Group has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.

Summary

Weyco Group beats Rocky Brands on 12 of the 14 factors compared between the two stocks.

Rocky Brands Company Profile

Rocky Brands, Inc. is a designer, manufacturer and marketer of footwear and apparel marketed under a portfolio of brand names, including Rocky, Georgia Boot, Durango, Lehigh, Creative Recreation and the licensed brand Michelin. The Company operates its business through three segments: wholesale, retail and military. In its wholesale segment, the Company distributes its products through a range of distribution channels representing over 10,000 retail store locations in the United States and Canada, as well as in other international markets. Its wholesale channels vary by product line and include sporting goods stores, outdoor retailers, independent shoe retailers, hardware stores, catalogs, mass merchants and uniform stores. In its retail segment, the Company sells its products directly to consumers through its consumer and business direct Websites and its Rocky outlet store. In its military segment, the Company sells footwear under the Rocky label to the United States military.

Weyco Group Company Profile

Weyco Group, Inc. is engaged in the design and distribution of footwear. The Company designs and markets footwear for men, women and children. The Company operates through two segments: the North American wholesale segment (wholesale) and the North American retail segment (retail). The Company also has other wholesale and retail businesses overseas, which include its businesses in Australia, South Africa and Asia Pacific (collectively known as Florsheim Australia), and its wholesale and retail businesses in Europe (Florsheim Europe). Its products consist of leather dress shoes and casual footwear composed of man-made materials or leather. In addition, the Company offers outdoor boots, shoes and sandals. As of December 31, 2016, the Company’s shoes were marketed throughout the United States and Canada in over 10,000 shoe, clothing and department stores. As of December 31, 2016, the retail segment consisted of 13 Company-operated stores and an Internet business in the United States.

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