Johnson Outdoors (NASDAQ:JOUT) vs. Leatt (OTCMKTS:LEAT) Critical Review

Leatt (OTCMKTS:LEAT) and Johnson Outdoors (NASDAQ:JOUT) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

0.6% of Leatt shares are owned by institutional investors. Comparatively, 64.1% of Johnson Outdoors shares are owned by institutional investors. 80.0% of Leatt shares are owned by company insiders. Comparatively, 28.2% of Johnson Outdoors shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations and price targets for Leatt and Johnson Outdoors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Leatt	0	0	0	0	0.00
Johnson Outdoors	1	1	0	0	1.50

Risk & Volatility

Leatt has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Johnson Outdoors has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500.

Profitability

This table compares Leatt and Johnson Outdoors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Leatt	5.93%	9.27%	7.85%
Johnson Outdoors	-2.33%	2.52%	1.74%

Earnings & Valuation

This table compares Leatt and Johnson Outdoors”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Leatt	$61.91 million	1.21	$3.26 million	$0.61	19.75
Johnson Outdoors	$592.41 million	0.82	-$34.29 million	($1.52)	-30.60

Leatt has higher earnings, but lower revenue than Johnson Outdoors. Johnson Outdoors is trading at a lower price-to-earnings ratio than Leatt, indicating that it is currently the more affordable of the two stocks.

Summary

Leatt beats Johnson Outdoors on 9 of the 12 factors compared between the two stocks.

About Leatt

Leatt Corporation designs, develops, markets, and distributes personal protective equipment for participants of motor sports and leisure activities worldwide. The company offers Leatt-Brace system, an injection molded neck protection system designed to prevent injuries to the cervical spine and neck. It also provides helmets for head and brain protection; and body armor products, including chest protectors, full upper body protectors, upper body protection vests, back protectors, knee braces, knee and elbow guards, off-road motorcycle boots, and mountain biking shoes. In addition, the company offers other products, parts, and accessories, such as goggles; toolbelt, duffel, gear, helmet bags, hats, and hydration kits; casual clothing, caps, and sunglasses; and apparel that comprises suits, jackets, jerseys, pants, shorts, socks, and gloves, as well as aftermarket support products. Further, it acts as the original equipment manufacturer for personal protective equipment sold by other brands. The company's products are used by riders of motorcycles, bicycles, snowmobiles, and ATVs. It sells its products to customers through a network of distributors and retailers; and direct to end consumers through digital channels and online store at leatt.com. The company was formerly known as Treadzone, Inc. and changed its name to Leatt Corporation in May 2005. The company was founded in 2001 and is headquartered in Durbanville, South Africa.

About Johnson Outdoors

Johnson Outdoors Inc. designs, manufactures, and markets seasonal and outdoor recreational products for fishing worldwide. It operates through four segments: Fishing, Camping, Watercraft Recreation, and Diving. The Fishing segment offers electric motors for trolling, marine battery chargers, and shallow water anchors; sonar and GPS equipment for fish finding, navigation, and marine cartography; and downriggers for controlled-depth fishing. This segment sells its products under the Minn Kota, Humminbird, and Cannon brands through outdoor specialty and Internet retailers, retail store chains, original equipment manufacturers, and distributors. The Camping segment provides consumer, commercial, and military tents and accessories; camping stoves; other recreational camping products; and portable outdoor cooking systems. This segment sells its products under the Eureka! and Jetboil brands through specialty stores, sporting goods stores, internet retailers, and direct to consumers. The Watercraft Recreation segment offers kayaks, canoes, and paddles for family recreation, touring, angling, and tripping through independent specialty and outdoor retailers under Old Town and Carlisle brands. The Diving segment manufactures and markets underwater diving and snorkeling equipment, such as regulators, buoyancy compensators, dive computers and gauges, wetsuits, masks, fins, snorkels, and accessories through independent specialty dive stores and diving magazines under the SCUBAPRO brand name. This segment also provides regular maintenance, product repair, diving education, and travel program services; and sells diving gear to dive training centers, resorts, and public safety units. It sells its products through websites. The company was founded in 1970 and is headquartered in Racine, Wisconsin.