Spectrum Brands (NYSE:SPB) and CAE (NYSE:CAE) are both mid-cap consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, dividends, valuation, earnings, profitability, risk and institutional ownership.
Risk and Volatility
Spectrum Brands has a beta of 1.94, indicating that its share price is 94% more volatile than the S&P 500. Comparatively, CAE has a beta of 1.73, indicating that its share price is 73% more volatile than the S&P 500.
Dividends
Spectrum Brands pays an annual dividend of $1.68 per share and has a dividend yield of 2.1%. CAE pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. Spectrum Brands pays out 41.0% of its earnings in the form of a dividend. CAE pays out 8.0% 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. Spectrum Brands has increased its dividend for 1 consecutive years. Spectrum Brands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Ratings
This is a summary of recent recommendations for Spectrum Brands and CAE, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Spectrum Brands | 0 | 3 | 5 | 0 | 2.63 |
CAE | 0 | 6 | 4 | 0 | 2.40 |
Spectrum Brands presently has a consensus target price of $65.6250, suggesting a potential downside of 18.14%. CAE has a consensus target price of $34.4286, suggesting a potential upside of 14.95%. Given CAE's higher probable upside, analysts plainly believe CAE is more favorable than Spectrum Brands.
Valuation & Earnings
This table compares Spectrum Brands and CAE's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Spectrum Brands | $3.96 billion | 0.86 | $97.80 million | $4.10 | 19.55 |
CAE | $2.70 billion | 3.14 | $234.11 million | $1.00 | 29.95 |
CAE has lower revenue, but higher earnings than Spectrum Brands. Spectrum Brands is trading at a lower price-to-earnings ratio than CAE, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Spectrum Brands and CAE's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Spectrum Brands | 2.46% | 13.35% | 3.59% |
CAE | 2.07% | 9.35% | 2.93% |
Insider & Institutional Ownership
92.6% of Spectrum Brands shares are owned by institutional investors. Comparatively, 52.3% of CAE shares are owned by institutional investors. 2.2% of Spectrum Brands shares are owned by insiders. Comparatively, 18.3% of CAE 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.
Summary
Spectrum Brands beats CAE on 11 of the 17 factors compared between the two stocks.