Johnson Outdoors (NASDAQ: JOUT) and Callaway Golf (NYSE:ELY) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, risk, earnings, dividends, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Johnson Outdoors and Callaway Golf, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Johnson Outdoors 0 0 2 0 3.00
Callaway Golf 0 4 8 0 2.67

Johnson Outdoors presently has a consensus target price of $46.50, suggesting a potential downside of 23.96%. Callaway Golf has a consensus target price of $14.89, suggesting a potential upside of 14.69%. Given Callaway Golf’s higher possible upside, analysts clearly believe Callaway Golf is more favorable than Johnson Outdoors.

Profitability

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

Net Margins Return on Equity Return on Assets
Johnson Outdoors 6.85% 12.90% 8.53%
Callaway Golf 18.09% 6.60% 4.89%

Dividends

Johnson Outdoors pays an annual dividend of $0.36 per share and has a dividend yield of 0.6%. Callaway Golf pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Johnson Outdoors pays out 11.1% of its earnings in the form of a dividend. Callaway Golf pays out 2.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Insider & Institutional Ownership

60.4% of Johnson Outdoors shares are held by institutional investors. Comparatively, 85.0% of Callaway Golf shares are held by institutional investors. 28.0% of Johnson Outdoors shares are held by insiders. Comparatively, 2.6% of Callaway Golf shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Johnson Outdoors and Callaway Golf’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Johnson Outdoors $473.75 million 1.13 $51.51 million $3.23 18.93
Callaway Golf $965.02 million 1.27 $89.78 million $1.82 7.13

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

Volatility and Risk

Johnson Outdoors has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, Callaway Golf has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.

Summary

Callaway Golf beats Johnson Outdoors on 10 of the 16 factors compared between the two stocks.

Johnson Outdoors Company Profile

Johnson Outdoors Inc. is a manufacturer and marketer of branded seasonal, outdoor recreation products. The Company operates through four segments: Marine Electronics, Outdoor Equipment, Watercraft and Diving. Its Marine Electronics segment’s brands are Minn Kota, Humminbird and Cannon. Its Outdoor Equipment segment’s brands are Eureka!, Jetboil and Silva. Its Watercraft segment designs and markets Necky sea touring kayaks; sit on top Ocean Kayaks, and Old Town canoes and kayaks for family recreation, touring, angling and tripping. The Company manufactures and markets underwater diving products for recreational divers, which it sells and distributes under the SCUBAPRO brand name. It markets a line of underwater diving and snorkeling equipment, including regulators, buoyancy compensators, dive computers and gauges, wetsuits, masks, fins, snorkels and accessories. The Company’s products are used for fishing from a boat, diving, paddling, hiking and camping.

Callaway Golf Company Profile

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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