Escalade (NASDAQ: ESCA) and Sturm, Ruger & (NYSE:RGR) are both small-cap cyclical consumer goods & services 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 Escalade and Sturm, Ruger &, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Escalade | 0 | 0 | 1 | 0 | 3.00 |
| Sturm, Ruger & | 0 | 2 | 0 | 0 | 2.00 |
Escalade currently has a consensus price target of $17.00, suggesting a potential upside of 36.00%. Sturm, Ruger & has a consensus price target of $53.50, suggesting a potential downside of 5.98%. Given Escalade’s stronger consensus rating and higher probable upside, equities analysts clearly believe Escalade is more favorable than Sturm, Ruger &.
Profitability
This table compares Escalade and Sturm, Ruger &’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Escalade | 4.50% | 5.92% | 4.07% |
| Sturm, Ruger & | 13.12% | 34.16% | 25.34% |
Institutional and Insider Ownership
26.0% of Escalade shares are held by institutional investors. Comparatively, 86.5% of Sturm, Ruger & shares are held by institutional investors. 20.0% of Escalade shares are held by company insiders. Comparatively, 3.9% of Sturm, Ruger & 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
Escalade pays an annual dividend of $0.46 per share and has a dividend yield of 3.7%. Sturm, Ruger & pays an annual dividend of $1.92 per share and has a dividend yield of 3.4%. Escalade pays out 58.2% of its earnings in the form of a dividend. Sturm, Ruger & pays out 42.0% 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.
Earnings & Valuation
This table compares Escalade and Sturm, Ruger &’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Escalade | $163.89 million | 1.09 | $18.64 million | $0.79 | 15.82 |
| Sturm, Ruger & | $658.57 million | 1.53 | $169.33 million | $4.57 | 12.45 |
Sturm, Ruger & has higher revenue and earnings than Escalade. Sturm, Ruger & is trading at a lower price-to-earnings ratio than Escalade, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Escalade has a beta of 0.08, suggesting that its stock price is 92% less volatile than the S&P 500. Comparatively, Sturm, Ruger & has a beta of 0.03, suggesting that its stock price is 97% less volatile than the S&P 500.
Summary
Sturm, Ruger & beats Escalade on 9 of the 16 factors compared between the two stocks.
About Escalade
Escalade, Incorporated (Escalade) is a manufacturer and distributor of sporting goods through its subsidiary Escalade Sports. The Company operates in Sporting Goods (Escalade Sports) segment. Escalade Sports manufactures, imports and distributes sporting goods brands in basketball goals, archery, indoor and outdoor game recreation and fitness products through sporting goods retailers, specialty dealers, key online retailers, traditional department stores and mass merchants. Escalade offers table tennis tables, residential in-ground basketball goals and in archery bows. Its brands, owned or distributed include Bear Archery, Trophy Ridge, Whisker Biscuit, Cajun Bowfishing, STIGA, Ping-Pong, Prince, Goalrilla, Goaliath, Silverback, Hoopstar, Goalsetter, Woodplay, Childlife, The STEP, USWeight, Atomic, Redline, Mizerak, Minnesota Fats, Accudart, Arachnid, Nodor, Pickleball Now, Onix and Viva Sol. Escalade Sports manufactures in the United States and Mexico, and imports product from Asia.
About Sturm, Ruger &
Sturm, Ruger & Company, Inc. is engaged in the design, manufacture, and sale of firearms to domestic customers. The Company operates through two segments: firearms and castings. The firearms segment manufactures and sells rifles, pistols, and revolvers principally to a range of federally licensed, independent wholesale distributors primarily located in the United States. The castings segment manufactures and sells steel investment castings and metal injection molding (MIM) parts. The Company’s design and manufacturing operations are located in the United States. The Company primarily offers products in three industry product categories: rifles, pistols, and revolvers. The Company’s firearms are sold through independent wholesale distributors, principally to the commercial sporting market. The Company manufactures firearm products under the Ruger name. The Company also manufactures and sells accessories and replacement parts for its firearms.
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