Rocky Brands (NASDAQ: RCKY) and Wolverine World Wide (NYSE:WWW) are both cyclical consumer goods & services companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, risk, profitabiliy and valuation.
Rocky Brands pays an annual dividend of $0.44 per share and has a dividend yield of 3.3%. Wolverine World Wide pays an annual dividend of $0.24 per share and has a dividend yield of 0.9%. Rocky Brands pays out -733.2% of its earnings in the form of a dividend. Wolverine World Wide pays out 27.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Rocky Brands is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
51.6% of Rocky Brands shares are held by institutional investors. Comparatively, 93.2% of Wolverine World Wide shares are held by institutional investors. 8.9% of Rocky Brands shares are held by company insiders. Comparatively, 5.7% of Wolverine World Wide shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This table compares Rocky Brands and Wolverine World Wide’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Wolverine World Wide||3.47%||14.14%||5.65%|
Valuation and Earnings
This table compares Rocky Brands and Wolverine World Wide’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Rocky Brands||$265.80 million||0.37||$11.36 million||($0.06)||-222.46|
|Wolverine World Wide||$2.51 billion||0.99||$261.70 million||$0.88||29.15|
Wolverine World Wide has higher revenue and earnings than Rocky Brands. Rocky Brands is trading at a lower price-to-earnings ratio than Wolverine World Wide, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and price targets for Rocky Brands and Wolverine World Wide, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Wolverine World Wide||1||4||3||0||2.25|
Rocky Brands currently has a consensus target price of $12.00, indicating a potential downside of 10.11%. Wolverine World Wide has a consensus target price of $22.83, indicating a potential downside of 10.98%. Given Rocky Brands’ higher probable upside, research analysts plainly believe Rocky Brands is more favorable than Wolverine World Wide.
Risk and Volatility
Rocky Brands has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500. Comparatively, Wolverine World Wide has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.
Wolverine World Wide beats Rocky Brands on 11 of the 15 factors compared between the two stocks.
Rocky Brands Company Profile
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, Creative Recreation 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.
Wolverine World Wide Company Profile
Wolverine World Wide, Inc. is a designer, manufacturer and marketer of a range of casual footwear and apparel, outdoor and athletic footwear and apparel, children’s footwear, industrial work boots and apparel, and uniform shoes and boots. It operates in four segments: Wolverine Outdoor & Lifestyle Group, which offers Merrell footwear and apparel, Cat footwear, Hush Puppies footwear and apparel, Chaco footwear, and Sebago footwear and apparel; Wolverine Boston Group, which offers Sperry footwear and apparel, Saucony footwear and apparel, and Keds footwear and apparel; Wolverine Heritage Group, which offers Wolverine footwear and apparel, Bates uniform footwear, Harley-Davidson footwear and HyTest safety footwear, and Wolverine Multi-Brand Group, which offers Stride Rite footwear and apparel, and its multi-brand consumer-direct businesses. It also operates a performance leather business. The Wolverine Leathers Division markets pigskin leather for use primarily in the footwear industry.
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