Contrasting Immersion (NASDAQ:IMMR) and Duluth (NASDAQ:DLTH)

Duluth (NASDAQ:DLTH) and Immersion (NASDAQ:IMMR) 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, valuation, profitability, risk, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for Duluth and Immersion, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Duluth	0	3	0	0	2.00
Immersion	0	2	1	0	2.33

Duluth presently has a consensus target price of $5.00, suggesting a potential upside of 13.64%. Immersion has a consensus target price of $13.50, suggesting a potential upside of 84.93%. Given Immersion’s stronger consensus rating and higher possible upside, analysts plainly believe Immersion is more favorable than Duluth.

Earnings and Valuation

This table compares Duluth and Immersion”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Duluth	$565.18 million	0.30	-$16.39 million	$0.14	31.43
Immersion	$1.73 billion	0.14	$4.52 million	$0.34	21.47

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

Volatility and Risk

Duluth has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500. Comparatively, Immersion has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Profitability

This table compares Duluth and Immersion’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Duluth	1.07%	-3.03%	-1.21%
Immersion	0.60%	1.83%	0.82%

Institutional & Insider Ownership

24.4% of Duluth shares are held by institutional investors. Comparatively, 60.6% of Immersion shares are held by institutional investors. 40.4% of Duluth shares are held by company insiders. Comparatively, 10.6% of Immersion shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Immersion beats Duluth on 9 of the 14 factors compared between the two stocks.

About Duluth

Duluth Holdings Inc. sells casual wear, workwear, and accessories for men and women under the Duluth Trading brand in the United States. It provides shirts, pants, underwear, tanks, outerwear, footwear, accessories, and hard goods. The company offers its products under various trademarks, trade names, and service marks, including Alaskan Hardgear, Armachillo, Ballroom, Bucket Master, Cab Commander, Crouch Gusset, Dry on the Fly, Duluth Trading Co, Duluthflex, Fire Hose, Longtail T, No-Yank, No Polo Shirt, Wild Boar Mocs, and Buck Naked. Duluth Holdings Inc. markets its products through its Website, catalogs, and retail stores. As of May 17, 2018, it operated 36 retail stores. The company was formerly known as GEMPLER'S, Inc. Duluth Holdings Inc. was founded in 1989 and is headquartered in Belleville, Wisconsin.

About Immersion

Immersion Corporation, together with its subsidiaries, engages in the creation, design, development, and licensing of haptic technologies that allow people to use their sense of touch to engage with and experience various digital products in North America, Europe, and Asia. The company provides technology, patent, and combined licenses. It serves markets, including mobility, gaming, automotive, virtual and augmented reality, and wearables, as well as residential, commercial, and industrial Internet of Things. The company was incorporated in 1993 and is headquartered in Aventura, Florida.