Smith & Wesson Brands (NASDAQ:SWBI) and Bassett Furniture Industries (NASDAQ:BSET) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.
Analyst Recommendations
This is a summary of recent ratings for Smith & Wesson Brands and Bassett Furniture Industries, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Smith & Wesson Brands | 0 | 2 | 3 | 0 | 2.60 |
| Bassett Furniture Industries | 0 | 0 | 1 | 0 | 3.00 |
Smith & Wesson Brands presently has a consensus target price of $23.20, suggesting a potential upside of 30.04%. Bassett Furniture Industries has a consensus target price of $25.50, suggesting a potential downside of 0.27%. Given Smith & Wesson Brands' higher probable upside, equities analysts clearly believe Smith & Wesson Brands is more favorable than Bassett Furniture Industries.
Insider and Institutional Ownership
65.6% of Smith & Wesson Brands shares are held by institutional investors. Comparatively, 54.4% of Bassett Furniture Industries shares are held by institutional investors. 2.6% of Smith & Wesson Brands shares are held by company insiders. Comparatively, 5.9% of Bassett Furniture Industries 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.
Profitability
This table compares Smith & Wesson Brands and Bassett Furniture Industries' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Smith & Wesson Brands | 4.34% | 39.05% | 22.58% |
| Bassett Furniture Industries | -5.80% | -0.63% | -0.28% |
Volatility & Risk
Smith & Wesson Brands has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500. Comparatively, Bassett Furniture Industries has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500.
Dividends
Smith & Wesson Brands pays an annual dividend of $0.20 per share and has a dividend yield of 1.1%. Bassett Furniture Industries pays an annual dividend of $0.50 per share and has a dividend yield of 2.0%. Smith & Wesson Brands pays out 24.4% of its earnings in the form of a dividend. Bassett Furniture Industries pays out 111.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Smith & Wesson Brands has raised its dividend for 1 consecutive years and Bassett Furniture Industries has raised its dividend for 1 consecutive years.
Earnings and Valuation
This table compares Smith & Wesson Brands and Bassett Furniture Industries' top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Smith & Wesson Brands | $678.39 million | 1.40 | $-61,230,000.00 | $0.82 | 21.76 |
| Bassett Furniture Industries | $452.09 million | 0.56 | $-1,930,000.00 | $0.45 | 56.82 |
Bassett Furniture Industries has lower revenue, but higher earnings than Smith & Wesson Brands. Smith & Wesson Brands is trading at a lower price-to-earnings ratio than Bassett Furniture Industries, indicating that it is currently the more affordable of the two stocks.
Summary
Smith & Wesson Brands beats Bassett Furniture Industries on 11 of the 16 factors compared between the two stocks.
