Reviewing Topgolf Callaway Brands (NYSE:CALY) and Shimano (OTCMKTS:SMNNY)

Shimano (OTCMKTS:SMNNY) and Topgolf Callaway Brands (NYSE:CALY) are both mid-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, risk, analyst recommendations, dividends, institutional ownership and profitability.

Analyst Ratings

This is a breakdown of recent ratings for Shimano and Topgolf Callaway Brands, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shimano	0	0	0	0	0.00
Topgolf Callaway Brands	1	2	0	0	1.67

Topgolf Callaway Brands has a consensus target price of $15.00, indicating a potential upside of 11.04%. Given Topgolf Callaway Brands’ stronger consensus rating and higher probable upside, analysts plainly believe Topgolf Callaway Brands is more favorable than Shimano.

Insider and Institutional Ownership

0.0% of Shimano shares are held by institutional investors. Comparatively, 84.7% of Topgolf Callaway Brands shares are held by institutional investors. 2.5% of Topgolf Callaway Brands shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Shimano pays an annual dividend of $0.07 per share and has a dividend yield of 0.7%. Topgolf Callaway Brands pays an annual dividend of $1.57 per share and has a dividend yield of 11.6%. Shimano pays out 29.2% of its earnings in the form of a dividend. Topgolf Callaway Brands pays out -490.6% 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. Topgolf Callaway Brands is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Shimano and Topgolf Callaway Brands”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shimano	$3.12 billion	2.76	$227.74 million	$0.24	41.43
Topgolf Callaway Brands	$2.06 billion	1.21	-$409.30 million	($0.32)	-42.22

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

Profitability

This table compares Shimano and Topgolf Callaway Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shimano	7.12%	2.86%	2.64%
Topgolf Callaway Brands	-1.66%	0.43%	0.14%

Risk and Volatility

Shimano has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, Topgolf Callaway Brands has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.

Summary

Shimano beats Topgolf Callaway Brands on 8 of the 15 factors compared between the two stocks.

About Shimano

Shimano Inc. develops, produces, and distributes bicycle components, fishing tackles, and rowing equipment. It has operations in Japan, Asia, Europe, North America, Latin America, and Oceania. Shimano Inc. was founded in 1921 and is headquartered in Sakai, Japan.

About Topgolf Callaway Brands

Topgolf Callaway Brands Corp. designs, manufactures, and sells golf equipment, golf and lifestyle apparel, and other accessories in the United States, Europe, Asia, and Internationally. The Topgolf segment operates Topgolf venues equipped with technology-enabled hitting bays, bars, dining areas, and event spaces, as well as Toptracer ball-flight tracking technology; and World Golf Tour digital golf game. The Golf Equipment segment provides drivers, fairway woods, hybrids, irons, wedges and packaged sets, putters, and pre-owned golf clubs under the Callaway and Odyssey brands, as well as golf balls under the Callaway Golf and Strata brands. The Active Lifestyle segment offers golf apparel and footwear; golf accessories, including golf bags, golf gloves, headwear, and practice aids under the Callaway brand; golf and lifestyle apparel, hats, luggage, and accessories under the TravisMathew brand; and footwear, belts, hats, facemasks, sunglasses, socks, and underwear under the Cuater by TravisMathew brand. This segment also provides storage and travel gear for sport and personal use, such as backpacks; travel, duffel, and golf bags; and storage gear accessories, as well as outerwear, headwear, and accessories under the OGIO brand. In addition, it offers outdoor apparel comprising jackets, trousers, dresses, skirts, and tops; and footwear and outdoor equipment, including packs and bags, travel bags, tents, sleeping bags, and accessories under the Jack Wolfskin brand. The company sells its products through golf retailers, sporting goods retailers, online retailers, mass merchants, department stores, third-party distributors, and mail order stores, as well as directly to consumers through its retail stores and websites. The company was formerly known as Callaway Golf Company and changed its name to Topgolf Callaway Brands Corp. in September 2022. Topgolf Callaway Brands Corp. was incorporated in 1982 and is headquartered in Carlsbad, California.