Coastal Contacts (NASDAQ: COA) and West Marine (NASDAQ:WMAR) are both small-cap cyclical consumer goods & services companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, valuation, analyst recommendations, institutional ownership and dividends.
Institutional and Insider Ownership
57.9% of West Marine shares are owned by institutional investors. 27.5% of West Marine shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This is a summary of current recommendations for Coastal Contacts and West Marine, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
West Marine has a consensus price target of $10.49, suggesting a potential downside of 19.16%. Given West Marine’s higher possible upside, analysts clearly believe West Marine is more favorable than Coastal Contacts.
West Marine pays an annual dividend of $0.20 per share and has a dividend yield of 1.5%. Coastal Contacts does not pay a dividend. West Marine pays out 64.5% of its earnings in the form of a dividend.
This table compares Coastal Contacts and West Marine’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation and Earnings
This table compares Coastal Contacts and West Marine’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
Coastal Contacts is trading at a lower price-to-earnings ratio than West Marine, indicating that it is currently the more affordable of the two stocks.
West Marine beats Coastal Contacts on 9 of the 10 factors compared between the two stocks.
Coastal Contacts Company Profile
Coastal Contacts Inc. is an online retailer of eyewear serving markets in North America, Europe and Asia Pacific. The Company operates in two primary product segments: contact lenses and glasses. The Company has approximately nine stores in Canada and Sweden. It sells contact lenses manufactured by multinational companies, such as Vistakon (a division of Johnson and Johnson Vision Care Inc.), Alcon, Inc., Bausch & Lomb Inc. and Coopervision Inc. Its products are offered for sale by telephone, e9 mail, through its Websites, which include www.ClearlyContacts.ca, www.ClearlyContacts.com.au, www.ClearlyContacts.co.nz, www.LensWay.se, www.LensWay.fi, www.LensWay.nl, www.LensWay.no, www.LensWay.co.uk, and www.ContactSan.com or at one of its nine physical retail locations. In April 2014, the Company announced that Essilor International (Compagnie Generale d’Optique), S.A. (Essilor) has indirectly acquired the interest of Coastal.com.
West Marine Company Profile
West Marine, Inc. is a waterlife outfitter for cruisers, sailors, anglers and paddlesports enthusiasts. The Company offers a selection of core boating and water recreation products, primarily serving the needs of boat owners and professionals providing services to them. It services its customers through physical stores and two e-commerce Websites. It is a specialty retailer of boating supplies, gear, apparel, footwear and other waterlife-related products. It operates approximately 260 stores located in approximately 40 states, Puerto Rico and Canada. Its products include boating products and merchandise expansion products. Its boating products include maintenance, electronics, sailboat hardware, anchors/docking/moorings, engine systems, boats/outboards, ventilation, navigation, trailering, seating/boat covers and barbecues/appliances. Its merchandise expansion products include clothing accessories, fishing, watersports, paddlesports, coolers and waterlife lifestyle accessories.
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