Acushnet Holdings Corp. (NYSE: GOLF) and Callaway Golf (NYSE:ELY) are both small-cap consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, risk, earnings, profitability, valuation, dividends and institutional ownership.

Profitability

This table compares Acushnet Holdings Corp. and Callaway Golf’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acushnet Holdings Corp. 4.25% 10.27% 3.91%
Callaway Golf 18.09% 6.60% 4.89%

Valuation & Earnings

This table compares Acushnet Holdings Corp. and Callaway Golf’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Acushnet Holdings Corp. $1.53 billion 0.78 $174.85 million $0.53 30.25
Callaway Golf $965.02 million 1.27 $89.78 million $1.82 7.14

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

Dividends

Acushnet Holdings Corp. pays an annual dividend of $0.48 per share and has a dividend yield of 3.0%. Callaway Golf pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Acushnet Holdings Corp. pays out 90.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Callaway Golf pays out 2.2% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current ratings and target prices for Acushnet Holdings Corp. and Callaway Golf, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acushnet Holdings Corp. 0 8 6 0 2.43
Callaway Golf 0 4 8 0 2.67

Acushnet Holdings Corp. presently has a consensus price target of $21.61, indicating a potential upside of 34.82%. Callaway Golf has a consensus price target of $14.89, indicating a potential upside of 14.60%. Given Acushnet Holdings Corp.’s higher probable upside, equities analysts plainly believe Acushnet Holdings Corp. is more favorable than Callaway Golf.

Insider & Institutional Ownership

39.2% of Acushnet Holdings Corp. shares are owned by institutional investors. Comparatively, 85.0% of Callaway Golf shares are owned by institutional investors. 54.0% of Acushnet Holdings Corp. shares are owned by insiders. Comparatively, 2.6% of Callaway Golf shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Callaway Golf beats Acushnet Holdings Corp. on 9 of the 15 factors compared between the two stocks.

Acushnet Holdings Corp. Company Profile

Acushnet Holdings Corp. is engaged in the design, development, manufacture and distribution of golf products. The Company is engaged in various product categories, such as golf clubs, wedges, putters, golf gloves, golf gear and golf wear. The Company operates in four segments: Titleist Golf Balls, Titleist Golf Clubs, Titleist Golf Gear and FootJoy Golf Wear. The company’s Titleist golf ball segment is engaged in designing and manufacturing a golf ball. It sells Titleist Pro V1. The Company also designs, manufactures and sells other golf balls under the Titleist brand, such as NXT Tour, Velocity and DT TruSoft, as well as under the Pinnacle brand. The Company designs, assembles and sells golf clubs (drivers, fairways, hybrids and irons) under the Titleist brand, wedges under the Vokey Design brand, and putters under the Scotty Cameron brand. Titleist golf clubs, Vokey Design wedges and Scotty Cameron putters are used by the players.

Callaway Golf Company Profile

Callaway Golf Company designs, manufactures and sells golf clubs, golf balls, golf bags and other golf-related accessories. The Company has two segments: the golf clubs segment and golf balls segment. The golf clubs segment consists of its woods, hybrids, irons and wedges, and Odyssey putters. This segment also includes other golf-related accessories, royalties from licensing of its trademarks and service marks and sales of pre-owned golf clubs. The golf balls segment consists of Callaway Golf and Strata balls that are designed, manufactured and sold by the Company. It sells its products to retailers, directly and through its subsidiaries, and to third-party distributors. It sells pre-owned golf products through its Website, www.callawaygolfpreowned.com. In addition, it sells Callaway Golf and Odyssey products, including Toulon Design by Odyssey, directly to consumers through its Websites, www.callawaygolf.com and www.odysseygolf.com.

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