Analyzing Johnson Outdoors (NASDAQ:JOUT) & BRP (NASDAQ:DOOO)

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

Dividends

Johnson Outdoors pays an annual dividend of $1.32 per share and has a dividend yield of 2.8%. BRP pays an annual dividend of $0.61 per share and has a dividend yield of 0.9%. Johnson Outdoors pays out -155.3% of its earnings in the form of a dividend. BRP pays out 164.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Johnson Outdoors has increased its dividend for 11 consecutive years and BRP has increased its dividend for 2 consecutive years. Johnson Outdoors is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Johnson Outdoors and BRP”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Johnson Outdoors	$660.91 million	0.75	-$34.29 million	($0.85)	-56.01
BRP	$8.03 billion	0.60	-$154.60 million	$0.37	177.00

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

Institutional and Insider Ownership

64.1% of Johnson Outdoors shares are held by institutional investors. 28.2% of Johnson Outdoors shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility and Risk

Johnson Outdoors has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, BRP has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Johnson Outdoors and BRP, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Johnson Outdoors	1	1	0	0	1.50
BRP	0	2	6	1	2.89

BRP has a consensus price target of $131.00, indicating a potential upside of 100.03%. Given BRP’s stronger consensus rating and higher possible upside, analysts plainly believe BRP is more favorable than Johnson Outdoors.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Johnson Outdoors	-1.21%	4.26%	2.90%
BRP	0.45%	67.30%	4.72%

Summary

BRP beats Johnson Outdoors on 11 of the 18 factors compared between the two stocks.

About Johnson Outdoors

Johnson Outdoors Inc. is a manufacturer of recreational outdoor equipment, with products focused on fishing, watercraft, and camping. Its brands include Minn Kota trolling motors, Humminbird fish-finding and marine electronics, Cannon downriggers, Old Town canoes and kayaks, and Jetboil cooking systems. The company’s products are sold in the United States and international markets through retailers and other distribution channels. Johnson Outdoors traces its roots to 1970, when it began as an outdoor recreation business established by S.C. Johnson.

About BRP

BRP Inc. is a Canadian company that designs, develops, manufactures and distributes powersports vehicles, marine products and related propulsion systems. Its brands include Ski-Doo snowmobiles, Sea-Doo personal watercraft and Can-Am on-road and off-road vehicles. The company also offers boats, Rotax engines, parts, accessories and riding gear. Its products are sold internationally through a network of dealers and distributors. BRP became an independent company in 2003 after separating from Bombardier Inc. Its history is linked to the development of snowmobiles by Bombardier founder Joseph-Armand Bombardier.