Investors are weighing the merits of two small-cap consumer discretionary companies, Johnson Outdoors (NASDAQ:JOUT) and Mastercraft Boat (NASDAQ:MCFT), to determine which presents a more attractive investment opportunity. A comprehensive analysis of their financial health, including risk, dividends, profitability, and analyst recommendations, reveals significant differences between the two firms.
Risk and Volatility Comparison
In terms of market volatility, Johnson Outdoors exhibits a beta of 0.89, indicating that its stock price fluctuates approximately 11% less than that of the S&P 500. In contrast, Mastercraft Boat has a beta of 1.04, suggesting its share price is 4% more volatile than the market benchmark. This distinction highlights a fundamental difference in risk exposure for potential investors.
Profitability Metrics
Profitability is a crucial aspect when evaluating these companies. Johnson Outdoors has reported net margins of -7.02%, a return on equity of -8.80%, and a return on assets of -6.30%. These figures indicate financial challenges for the company. Conversely, Mastercraft Boat boasts a net margin of 5.50%, a return on equity of 8.09%, and a return on assets of 5.73%. These positive metrics suggest Mastercraft is operating more efficiently and profitably.
The ownership structure also plays a role in investment decisions. Institutional investors hold 64.1% of Johnson Outdoors shares, while a substantial 97.6% of Mastercraft Boat shares are owned by institutional investors. Insider ownership for Johnson Outdoors stands at 28.0%, whereas only 2.5% of Mastercraft shares are held by insiders. High institutional ownership often signals confidence in a company’s future performance.
Analyst Recommendations and Earnings Outlook
Recent ratings from analysts provide further insight into investor sentiment. Johnson Outdoors has received one sell rating and ten hold ratings, resulting in an overall rating score of 1.50. On the other hand, Mastercraft Boat has garnered six hold ratings and one strong buy, achieving a rating score of 2.38. With a consensus target price of $23.00, analysts believe Mastercraft has a potential upside of 33.64%, further tilting favor toward this company as a preferred investment.
When examining revenue and earnings performance, Johnson Outdoors reported gross revenue of $562.53 million and a net income loss of $26.53 million. Its earnings per share stand at -$3.87, with a price-to-earnings ratio of 9.59. In contrast, Mastercraft Boat generated gross revenue of $284.20 million and a net income of $7.04 million. With earnings per share at $0.97 and a higher price-to-earnings ratio of 17.74, Mastercraft’s financial health appears stronger despite its lower revenue.
In summary, Mastercraft Boat surpasses Johnson Outdoors in 13 out of 15 evaluated factors. These findings position Mastercraft as a more favorable investment option, backed by stronger profitability metrics and analyst confidence.
Company Overviews
Johnson Outdoors, headquartered in Racine, Wisconsin, specializes in designing, manufacturing, and marketing outdoor recreational products. Its operations span four segments: Fishing, Camping, Watercraft Recreation, and Diving. The company offers a range of products under well-known brands such as Minn Kota, Humminbird, and SCUBAPRO.
Mastercraft Boat Holdings, Inc., based in Vonore, Tennessee, focuses on recreational powerboats and operates under segments including MasterCraft, Crest, and Aviara. The company produces various types of boats and accessories, selling its products through a network of independent dealers both domestically and internationally.
As the investment landscape continues to evolve, potential investors should consider these analyses carefully to make informed decisions regarding their portfolios.
