Head-To-Head Survey: Clarus (NASDAQ:CLAR) and Smith & Wesson Brands (NASDAQ:SWBI)

Smith & Wesson Brands (NASDAQ:SWBI) and Clarus (NASDAQ:CLAR) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, risk, dividends, valuation and earnings.

Dividends

Smith & Wesson Brands pays an annual dividend of $0.52 per share and has a dividend yield of 6.1%. Clarus pays an annual dividend of $0.10 per share and has a dividend yield of 3.0%. Smith & Wesson Brands pays out 216.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Clarus pays out -4.7% of its earnings in the form of a dividend. Smith & Wesson Brands has increased its dividend for 4 consecutive years. Smith & Wesson Brands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

59.3% of Smith & Wesson Brands shares are owned by institutional investors. Comparatively, 90.3% of Clarus shares are owned by institutional investors. 1.6% of Smith & Wesson Brands shares are owned by insiders. Comparatively, 22.3% of Clarus shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Smith & Wesson Brands and Clarus, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smith & Wesson Brands	1	2	1	0	2.00
Clarus	1	2	2	0	2.20

Smith & Wesson Brands currently has a consensus target price of $12.00, indicating a potential upside of 40.85%. Clarus has a consensus target price of $4.75, indicating a potential upside of 41.37%. Given Clarus’ stronger consensus rating and higher probable upside, analysts plainly believe Clarus is more favorable than Smith & Wesson Brands.

Profitability

This table compares Smith & Wesson Brands and Clarus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smith & Wesson Brands	2.34%	3.10%	2.00%
Clarus	-31.52%	-4.30%	-3.40%

Earnings & Valuation

This table compares Smith & Wesson Brands and Clarus”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smith & Wesson Brands	$471.40 million	0.80	$13.43 million	$0.24	35.50
Clarus	$264.32 million	0.49	-$52.29 million	($2.11)	-1.59

Smith & Wesson Brands has higher revenue and earnings than Clarus. Clarus is trading at a lower price-to-earnings ratio than Smith & Wesson Brands, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Smith & Wesson Brands has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500. Comparatively, Clarus has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500.

Summary

Smith & Wesson Brands beats Clarus on 11 of the 17 factors compared between the two stocks.

About Smith & Wesson Brands

Smith & Wesson Brands, Inc. is a holding company, which engages in the manufacture, design, and provision of firearms. Its portfolio includes handguns, long guns, handcuffs, suppressor, and other firearm-related products. The firm’s brands are Smith & Wesson, M&P, Thompson/Center Arms, and Gemtech. The company was founded by Horace Smith and Daniel Baird Wesson in 1852 and is headquartered in Maryville, TN.

About Clarus

Clarus Corporation designs, develops, manufactures, and distributes outdoor equipment and lifestyle products in the United States and internationally. The company operates through two segments, Outdoor and Adventure. The Outdoor segment offers apparels, such as shells, insulation, midlayers, pants, and logowear; rock-climbing footwear and equipment, including carabiners, protection devices, harnesses, belay devices, helmets, and ice-climbing gears; technical backpacks and day packs; trekking poles; headlamps and lanterns; gloves and mittens; and skis, ski poles, ski skins, avalanche airbag systems, avalanche transceivers, shovels, and probes. This segment offers its products for climbing, mountaineering, trail running, backpacking, skiing, and other outdoor recreation activities under the Black Diamond Equipment and PIEPS brands. The Adventure segment offers engineered automotive roof racks, trays, mounting systems, luggage boxes, carriers, recovery boards, and accessories under the Rhino-Rack brand; and overlanding and off-road vehicle recovery and extraction tracks for the overland and the off-road market under the MAXTRAX brand, as well as sells and retails overlanding and off-road vehicle under the TRED brand. It markets and distributes its products through independent specialty stores and specialty chains, sporting goods and outdoor recreation stores, distributors, and original equipment manufacturers; and independent distributors, as well as through its websites. The company was formerly known as Black Diamond, Inc. and changed its name to Clarus Corporation in August 2017. The company was founded in 1957 and is headquartered in Salt Lake City, Utah.