Rocky Brands (NASDAQ: RCKY) and Iconix Brand Group (NASDAQ:ICON) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, dividends and risk.

Institutional and Insider Ownership

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58.8% of Rocky Brands shares are owned by institutional investors. Comparatively, 61.5% of Iconix Brand Group shares are owned by institutional investors. 8.5% of Rocky Brands shares are owned by insiders. Comparatively, 1.8% of Iconix Brand Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Rocky Brands has a beta of 0.32, suggesting that its share price is 68% less volatile than the S&P 500. Comparatively, Iconix Brand Group has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Earnings and Valuation

This table compares Rocky Brands and Iconix Brand Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rocky Brands $253.20 million 0.63 $9.58 million $1.16 18.59
Iconix Brand Group $225.83 million 0.28 -$489.25 million $0.78 1.28

Rocky Brands has higher revenue and earnings than Iconix Brand Group. Iconix Brand Group is trading at a lower price-to-earnings ratio than Rocky Brands, indicating that it is currently the more affordable of the two stocks.

Dividends

Rocky Brands pays an annual dividend of $0.44 per share and has a dividend yield of 2.0%. Iconix Brand Group does not pay a dividend. Rocky Brands pays out 37.9% of its earnings in the form of a dividend.

Profitability

This table compares Rocky Brands and Iconix Brand Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rocky Brands 3.79% 6.24% 4.81%
Iconix Brand Group -217.71% 20.17% 3.25%

Analyst Ratings

This is a summary of current ratings and target prices for Rocky Brands and Iconix Brand Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rocky Brands 0 2 0 0 2.00
Iconix Brand Group 0 6 0 0 2.00

Rocky Brands currently has a consensus price target of $16.00, indicating a potential downside of 25.82%. Iconix Brand Group has a consensus price target of $5.00, indicating a potential upside of 400.00%. Given Iconix Brand Group’s higher possible upside, analysts plainly believe Iconix Brand Group is more favorable than Rocky Brands.

Summary

Rocky Brands beats Iconix Brand Group on 9 of the 14 factors compared between the two stocks.

About Rocky Brands

Rocky Brands, Inc. is a designer, manufacturer and marketer of footwear and apparel marketed under a portfolio of brand names, including Rocky, Georgia Boot, Durango, Lehigh and the licensed brand Michelin. The Company operates its business through three segments: wholesale, retail and military. In its wholesale segment, the Company distributes its products through a range of distribution channels representing over 10,000 retail store locations in the United States and Canada, as well as in other international markets. Its wholesale channels vary by product line and include sporting goods stores, outdoor retailers, independent shoe retailers, hardware stores, catalogs, mass merchants and uniform stores. In its retail segment, the Company sells its products directly to consumers through its consumer and business direct Websites and its Rocky outlet store. In its military segment, the Company sells footwear under the Rocky label to the United States military.

About Iconix Brand Group

Iconix Brand Group, Inc. is a brand management company. As of December 31, 2016, the Company owned a portfolio of over 30 global consumer brands across women’s, men’s, and home categories. The Company operates through segments: men’s, women’s, home and international. The Company’s brand portfolio includes brands, such as Candie’s, Bongo, Joe Boxer, Rampage, Mudd, London Fog, Mossimo, Ocean Pacific/OP, Danskin/Danskin Now, Rocawear/Roc Nation, Cannon, Royal Velvet, Fieldcrest, Charisma, Starter, Waverly, Ecko Unltd/Mark Ecko Cut & Sew, Zoo York, Umbro, Lee Cooper and Artful Dodger, and interests in Material Girl, Ed Hardy, Truth or Dare, Modern Amusement, Buffalo, Nick Graham Hydraulic and PONY brands. It operates in various geographic regions, including the United States, Japan and Other (which principally represent Latin America and Europe).

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