Comparing Acushnet (NYSE:GOLF) & Shimano (OTCMKTS:SMNNY)

Shimano (OTCMKTS:SMNNY) and Acushnet (NYSE:GOLF) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, institutional ownership, profitability and earnings.

Valuation and Earnings

This table compares Shimano and Acushnet”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shimano	$2.98 billion	3.35	$503.78 million	$0.26	43.85
Acushnet	$2.46 billion	1.90	$214.30 million	$3.74	21.27

Shimano has higher revenue and earnings than Acushnet. Acushnet is trading at a lower price-to-earnings ratio than Shimano, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Shimano and Acushnet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shimano	7.53%	4.23%	3.89%
Acushnet	9.24%	28.05%	9.94%

Volatility & Risk

Shimano has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, Acushnet has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Shimano and Acushnet, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shimano	0	0	0	0	0.00
Acushnet	1	4	1	0	2.00

Acushnet has a consensus target price of $73.3333, indicating a potential downside of 7.82%. Given Acushnet’s stronger consensus rating and higher probable upside, analysts plainly believe Acushnet is more favorable than Shimano.

Insider & Institutional Ownership

0.0% of Shimano shares are held by institutional investors. Comparatively, 53.1% of Acushnet shares are held by institutional investors. 53.6% of Acushnet shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Shimano pays an annual dividend of $0.12 per share and has a dividend yield of 1.1%. Acushnet pays an annual dividend of $0.94 per share and has a dividend yield of 1.2%. Shimano pays out 46.2% of its earnings in the form of a dividend. Acushnet pays out 25.1% 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. Acushnet has increased its dividend for 8 consecutive years. Acushnet is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Acushnet beats Shimano on 13 of the 17 factors compared between the two stocks.

About Shimano

Shimano Inc. develops, produces, and distributes bicycle components, fishing tackles, and rowing equipment. It has operations in Japan, Asia, Europe, North America, Latin America, and Oceania. Shimano Inc. was founded in 1921 and is headquartered in Sakai, Japan.

About Acushnet

Acushnet Holdings Corp. designs, develops, manufactures, and distributes golf products in the United States, Europe, the Middle East, Africa, Japan, Korea, and internationally. The company operates through four segments: Titleist Golf Balls, Titleist Golf Clubs, Titleist Golf Gear, and FootJoy Golf Wear. It offers golf balls under the Titleist brand; golf clubs, such as drivers, fairways, hybrids, and irons under the Titleist brand; wedges under the Vokey Design brand; and putters under the Scotty Cameron brand. The company also provides golf bags, headwear, golf gloves, travel products, and other golf accessories. In addition, it offers golf shoes, gloves, golf outerwear, and men’s and women’s golf apparel under the FootJoy brand; and ski, golf, and lifestyle apparel under the KJUS brand name. It sells its products through on-course golf shops and golf specialty retailers, as well as through representatives, other retailers, and online. The company was formerly known as Alexandria Holdings Corp. and changed its name to Acushnet Holdings Corp. in March 2016. Acushnet Holdings Corp. was founded in 1910 and is headquartered in Fairhaven, Massachusetts.