Golfsmith International Holdings (NASDAQ: GOLF) and Dick’s Sporting Goods (NYSE:DKS) are both services companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, valuation, profitability, analyst recommendations, risk, dividends and earnings.

Institutional and Insider Ownership

75.5% of Dick’s Sporting Goods shares are held by institutional investors. 23.1% of Dick’s Sporting Goods shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Golfsmith International Holdings and Dick’s Sporting Goods’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Golfsmith International Holdings N/A N/A N/A
Dick’s Sporting Goods 3.74% 19.09% 8.54%

Dividends

Dick’s Sporting Goods pays an annual dividend of $0.68 per share and has a dividend yield of 2.6%. Golfsmith International Holdings does not pay a dividend. Dick’s Sporting Goods pays out 24.3% of its earnings in the form of a dividend. Golfsmith International Holdings has raised its dividend for 2 consecutive years.

Analyst Ratings

This is a summary of current ratings for Golfsmith International Holdings and Dick’s Sporting Goods, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Golfsmith International Holdings 0 8 5 0 2.38
Dick’s Sporting Goods 2 23 5 0 2.10

Golfsmith International Holdings presently has a consensus price target of $20.57, indicating a potential upside of 25.67%. Dick’s Sporting Goods has a consensus price target of $40.08, indicating a potential upside of 52.97%. Given Dick’s Sporting Goods’ higher possible upside, analysts plainly believe Dick’s Sporting Goods is more favorable than Golfsmith International Holdings.

Valuation and Earnings

This table compares Golfsmith International Holdings and Dick’s Sporting Goods’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Golfsmith International Holdings $1.53 billion 0.80 $174.85 million N/A N/A
Dick’s Sporting Goods $8.28 billion 0.34 $751.31 million $2.80 9.36

Dick’s Sporting Goods has higher revenue and earnings than Golfsmith International Holdings.

Summary

Dick’s Sporting Goods beats Golfsmith International Holdings on 9 of the 14 factors compared between the two stocks.

Golfsmith International Holdings Company Profile

Golfsmith International Holdings, Inc, the parent company of Golfsmith International, Inc, is a holding company. The Company is a specialty retailer of golf and tennis equipment, apparel, footwear and accessories. The Company operates as an integrated multi-channel retailer, providing its customers the convenience of shopping in the retail stores across United States, through its Internet site, www.golfsmith.com, and from its catalogs.

Dick’s Sporting Goods Company Profile

Dick’s Sporting Goods, Inc. is an omni-channel sporting goods retailer offering an assortment of sports equipment, apparel, footwear and accessories in its specialty retail stores primarily in the eastern United States. The Company also owns and operates Golf Galaxy, Field & Stream and other specialty concept stores, and Dick’s Team Sports HQ, an all-in-one youth sports digital platform offering free league management services, mobile applications for scheduling, communications and live scorekeeping, custom uniforms and FanWear and access to donations and sponsorships. The Company offers its products through a content-rich e-commerce platform that is integrated with its store network and provides customers with the convenience and expertise of a 24-hour storefront. It offers products to its customers through its retail stores and online. The Company offers hardlines, which include items, such as sporting goods equipment, fitness equipment, golf equipment, and hunting and fishing gear.

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