Critical Review: BRP (NASDAQ:DOOO) & Johnson Outdoors (NASDAQ:JOUT)

BRP (NASDAQ:DOOO) and Johnson Outdoors (NASDAQ:JOUT) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Institutional & Insider Ownership

64.0% of Johnson Outdoors shares are held by institutional investors. 28.2% of Johnson Outdoors shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares BRP and Johnson Outdoors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BRP	0.45%	67.30%	4.72%
Johnson Outdoors	-1.21%	4.26%	2.90%

Dividends

BRP pays an annual dividend of $0.61 per share and has a dividend yield of 1.0%. Johnson Outdoors pays an annual dividend of $1.32 per share and has a dividend yield of 2.8%. BRP pays out 164.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Johnson Outdoors pays out -155.3% of its earnings in the form of a dividend. BRP has increased its dividend for 2 consecutive years and Johnson Outdoors has increased its dividend for 11 consecutive years. Johnson Outdoors is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

BRP has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500. Comparatively, Johnson Outdoors has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500.

Earnings & Valuation

This table compares BRP and Johnson Outdoors”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BRP	$8.03 billion	0.58	-$154.60 million	$0.37	170.89
Johnson Outdoors	$592.41 million	0.85	-$34.29 million	($0.85)	-56.24

Johnson Outdoors has lower revenue, but higher earnings than BRP. Johnson Outdoors is trading at a lower price-to-earnings ratio than BRP, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for BRP and Johnson Outdoors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BRP	0	2	5	1	2.88
Johnson Outdoors	1	1	0	0	1.50

BRP currently has a consensus price target of $131.00, suggesting a potential upside of 107.18%. Given BRP’s stronger consensus rating and higher probable upside, research analysts clearly believe BRP is more favorable than Johnson Outdoors.

Summary

BRP beats Johnson Outdoors on 11 of the 18 factors compared between the two stocks.

About BRP

BRP Inc. is a Canadian company that designs, develops, manufactures and distributes powersports vehicles, marine products and related propulsion systems. Its brands include Ski-Doo snowmobiles, Sea-Doo personal watercraft and Can-Am on-road and off-road vehicles. The company also offers boats, Rotax engines, parts, accessories and riding gear. Its products are sold internationally through a network of dealers and distributors. BRP became an independent company in 2003 after separating from Bombardier Inc. Its history is linked to the development of snowmobiles by Bombardier founder Joseph-Armand Bombardier.

About Johnson Outdoors

Johnson Outdoors Inc. is a manufacturer of recreational outdoor equipment, with products focused on fishing, watercraft, and camping. Its brands include Minn Kota trolling motors, Humminbird fish-finding and marine electronics, Cannon downriggers, Old Town canoes and kayaks, and Jetboil cooking systems. The company’s products are sold in the United States and international markets through retailers and other distribution channels. Johnson Outdoors traces its roots to 1970, when it began as an outdoor recreation business established by S.C. Johnson.