Sturm, Ruger & Company, Inc. (NYSE:RGR) & JAKKS Pacific (NASDAQ:JAKK) Head-To-Head Analysis

JAKKS Pacific (NASDAQ:JAKK) and Sturm, Ruger & Company, Inc. (NYSE:RGR) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.

Dividends

JAKKS Pacific pays an annual dividend of $1.00 per share and has a dividend yield of 4.1%. Sturm, Ruger & Company, Inc. pays an annual dividend of $0.84 per share and has a dividend yield of 2.1%. JAKKS Pacific pays out 71.9% of its earnings in the form of a dividend. Sturm, Ruger & Company, Inc. pays out 112.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. JAKKS Pacific is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares JAKKS Pacific and Sturm, Ruger & Company, Inc.”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
JAKKS Pacific	$570.67 million	0.48	$9.87 million	$1.39	17.36
Sturm, Ruger & Company, Inc.	$546.06 million	1.20	-$4.39 million	$0.75	54.56

JAKKS Pacific has higher revenue and earnings than Sturm, Ruger & Company, Inc.. JAKKS Pacific is trading at a lower price-to-earnings ratio than Sturm, Ruger & Company, Inc., indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations for JAKKS Pacific and Sturm, Ruger & Company, Inc., as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
JAKKS Pacific	0	2	0	0	2.00
Sturm, Ruger & Company, Inc.	1	1	1	0	2.00

Sturm, Ruger & Company, Inc. has a consensus target price of $46.00, indicating a potential upside of 12.42%. Given Sturm, Ruger & Company, Inc.’s higher probable upside, analysts plainly believe Sturm, Ruger & Company, Inc. is more favorable than JAKKS Pacific.

Insider & Institutional Ownership

44.4% of JAKKS Pacific shares are held by institutional investors. Comparatively, 64.0% of Sturm, Ruger & Company, Inc. shares are held by institutional investors. 4.2% of JAKKS Pacific shares are held by company insiders. Comparatively, 4.6% of Sturm, Ruger & Company, Inc. 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.

Volatility & Risk

JAKKS Pacific has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500. Comparatively, Sturm, Ruger & Company, Inc. has a beta of 0.19, meaning that its share price is 81% less volatile than the S&P 500.

Profitability

This table compares JAKKS Pacific and Sturm, Ruger & Company, Inc.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
JAKKS Pacific	2.77%	4.33%	2.42%
Sturm, Ruger & Company, Inc.	2.11%	6.58%	5.35%

Summary

Sturm, Ruger & Company, Inc. beats JAKKS Pacific on 8 of the 15 factors compared between the two stocks.

About JAKKS Pacific

JAKKS Pacific, Inc. designs, produces, markets, sells, and distributes toys and related products, electronic products, and other consumer products worldwide. It operates through two segments, Toys/Consumer Products and Costumes. The company offers action figures and accessories, such as licensed characters; toy vehicles and accessories; dolls and accessories, including small, large, fashion, and baby dolls based on licenses, as well as infant and pre-school products; private label products; and foot-to-floor ride-on products. The company also provides role play, dress-up, pretend play, and novelty products for boys and girls based on brands and entertainment properties, as well as on its own proprietary brands; and indoor and outdoor kids' furniture, activity trays and tables, room décor, and seasonal and outdoor products. In addition, it offers Halloween and everyday costumes for various ages based on licensed and proprietary non-licensed brands, and related Halloween accessories; outdoor activity toys; junior sports toys, including hyper-charged balls, sport sets, and toy hoops; and board games. The company sells its products through in-house sales staff and independent sales representatives to toy and mass-market retail chain stores, department stores, office supply stores, drug and grocery store chains, club stores, value-oriented dollar stores, toy specialty stores, and wholesalers. JAKKS Pacific, Inc. was incorporated in 1995 and is headquartered in Santa Monica, California.

About Sturm, Ruger & Company, Inc.

Sturm, Ruger & Co., Inc. engages in the business of designing, manufacturing, and selling firearms to domestic customers. It operates through the Firearms and Castings segments. The Firearms segment focuses on manufacturing and selling rifles, pistols, and revolvers principally to a number of federally licensed, independent wholesale distributors. The Castings segment offers steel investment castings and metal injection molding parts. The company was founded by William B. Ruger in 1949 and is headquartered in Southport, CT.