Comfort Systems USA (NYSE: FIX) and American Outdoor Brands Corporation (NASDAQ:AOBC) are both small-cap construction companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, dividends and analyst recommendations.

Profitability

This table compares Comfort Systems USA and American Outdoor Brands Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Comfort Systems USA 3.77% 16.52% 8.35%
American Outdoor Brands Corporation 13.87% 37.76% 19.75%

Institutional and Insider Ownership

92.5% of Comfort Systems USA shares are owned by institutional investors. Comparatively, 72.6% of American Outdoor Brands Corporation shares are owned by institutional investors. 3.5% of Comfort Systems USA shares are owned by insiders. Comparatively, 2.3% of American Outdoor Brands Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility & Risk

Comfort Systems USA has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500. Comparatively, American Outdoor Brands Corporation has a beta of 0.11, suggesting that its stock price is 89% less volatile than the S&P 500.

Dividends

Comfort Systems USA pays an annual dividend of $0.30 per share and has a dividend yield of 0.9%. American Outdoor Brands Corporation does not pay a dividend. Comfort Systems USA pays out 18.0% of its earnings in the form of a dividend. Comfort Systems USA has raised its dividend for 4 consecutive years.

Analyst Recommendations

This is a summary of current recommendations for Comfort Systems USA and American Outdoor Brands Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Comfort Systems USA 0 2 2 0 2.50
American Outdoor Brands Corporation 0 6 3 0 2.33

Comfort Systems USA presently has a consensus price target of $83.00, indicating a potential upside of 148.50%. American Outdoor Brands Corporation has a consensus price target of $21.33, indicating a potential upside of 25.93%. Given Comfort Systems USA’s stronger consensus rating and higher possible upside, research analysts plainly believe Comfort Systems USA is more favorable than American Outdoor Brands Corporation.

Valuation & Earnings

This table compares Comfort Systems USA and American Outdoor Brands Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Comfort Systems USA $1.67 billion 0.75 $129.25 million $1.67 20.00
American Outdoor Brands Corporation $903.19 million 1.01 $257.73 million $2.21 7.67

American Outdoor Brands Corporation has higher revenue, but lower earnings than Comfort Systems USA. American Outdoor Brands Corporation is trading at a lower price-to-earnings ratio than Comfort Systems USA, indicating that it is currently the more affordable of the two stocks.

Summary

Comfort Systems USA beats American Outdoor Brands Corporation on 9 of the 17 factors compared between the two stocks.

Comfort Systems USA Company Profile

Comfort Systems USA, Inc. is a provider of mechanical contracting services, which principally includes heating, ventilation and air conditioning (HVAC), plumbing, piping and controls, as well as off-site construction, electrical, monitoring and fire protection. As of December 31, 2016, the Company installed, maintained, repaired and replaced products and systems throughout its 35 operating units in 84 cities and 91 locations throughout the United States. The Company operates primarily in the commercial, industrial and institutional HVAC markets and offers services in the industrial, healthcare, education, office, technology, retail and government facilities. The Company provides a range of construction, renovation, expansion, maintenance, repair and replacement services for mechanical and related systems in commercial, industrial and institutional properties. The Company also provides remote monitoring of temperature, pressure, humidity and air flow for HVAC systems.

American Outdoor Brands Corporation Company Profile

American Outdoor Brands Corporation, formerly Smith & Wesson Holding Corporation, is a manufacturer of firearms and a provider of accessory products for the shooting, hunting and outdoor enthusiast. The Company operates through two segments. The Firearms segment manufactures handgun and long gun products sold under the Smith & Wesson, M&P and Thompson/Center Arms brands, as well as providing forging, machining and precision plastic injection molding services. The Outdoor Products & Accessories segment provides shooting, hunting and outdoor accessories, including reloading, gunsmithing, gun cleaning supplies, tree saws, vault accessories, knives, laser sighting systems and tactical lighting products. Brands in Outdoor Products & Accessories include Crimson Trace, Caldwell Shooting Supplies, Wheeler Engineering, Lockdown Vault Accessories, BOG POD and Golden Rod Moisture Control, as well as knives and specialty tools under Schrade, Old Timer, Uncle Henry and Imperial.

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