Critical Analysis: Lowe’s Companies (NYSE:LOW) vs. Outdoor (NASDAQ:POWW)

Outdoor (NASDAQ:POWW) and Lowe’s Companies (NYSE:LOW) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.

Analyst Recommendations

This is a breakdown of recent recommendations for Outdoor and Lowe’s Companies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Outdoor	0	2	2	0	2.50
Lowe’s Companies	2	12	22	1	2.59

Outdoor currently has a consensus price target of $2.62, suggesting a potential upside of 14.13%. Lowe’s Companies has a consensus price target of $253.48, suggesting a potential upside of 12.59%. Given Outdoor’s higher possible upside, equities research analysts clearly believe Outdoor is more favorable than Lowe’s Companies.

Valuation and Earnings

This table compares Outdoor and Lowe’s Companies”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Outdoor	$51.12 million	5.22	-$3.54 million	$0.03	76.67
Lowe’s Companies	$86.29 billion	1.46	$6.65 billion	$11.83	19.03

Lowe’s Companies has higher revenue and earnings than Outdoor. Lowe’s Companies is trading at a lower price-to-earnings ratio than Outdoor, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

26.4% of Outdoor shares are owned by institutional investors. Comparatively, 74.1% of Lowe’s Companies shares are owned by institutional investors. 28.1% of Outdoor shares are owned by insiders. Comparatively, 0.3% of Lowe’s Companies shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Outdoor has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500. Comparatively, Lowe’s Companies has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500.

Profitability

This table compares Outdoor and Lowe’s Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Outdoor	12.08%	1.90%	1.67%
Lowe’s Companies	7.34%	-75.67%	12.82%

Summary

Lowe’s Companies beats Outdoor on 8 of the 15 factors compared between the two stocks.

About Outdoor

AMMO, Inc. designs, produces, and markets ammunition and ammunition component products for sport and recreational shooters, hunters, individuals seeking home or personal protection, manufacturers, and law enforcement and military agencies. The company's products include STREAK Visual Ammunition that enables shooters to see the path of the bullets fired by them; and Stelth Subsonic ammunition primarily for suppressed firearms. It also owns and operates GunBroker.com, an auction site that supports the lawful sale of firearms, ammunition, and hunting/shooting accessories. In addition, the company's products comprises of armor piercing and hard armor piercing incendiary precision ammunition; and ammunition casings for pistol ammunition through large rifle ammunition. The company has a license agreement with Jeff Rann's ammunition for game hunting. AMMO, Inc. was founded in 2016 and is based in Scottsdale, Arizona.

About Lowe’s Companies

Lowe’s Companies, Inc., together with its subsidiaries, operates as a home improvement retailer in the United States. The company offers a line of products for construction, maintenance, repair, remodeling, and decorating. It also provides home improvement products, such as appliances, seasonal and outdoor living, lawn and garden, lumber, kitchens and bath, tools, paint, millwork, hardware, flooring, rough plumbing, building materials, décor, and electrical. In addition, the company offers installation services through independent contractors in various product categories; and extended protection plans and repair services. It sells its national brand-name merchandise and private brand products to professional customers, homeowners, renters, businesses, and government. The company also sells its products through Lowes.com website; and through mobile applications. Lowe’s Companies, Inc. was founded in 1921 and is based in Mooresville, North Carolina.