Smith & Wesson Brands (NASDAQ:SWBI – Get Free Report) and Funko (NASDAQ:FNKO – Get Free Report) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.
Profitability
This table compares Smith & Wesson Brands and Funko’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Smith & Wesson Brands | 4.44% | 6.60% | 4.59% |
| Funko | -0.21% | 2.61% | 0.71% |
Volatility & Risk
Smith & Wesson Brands has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, Funko has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500.
Earnings and Valuation
This table compares Smith & Wesson Brands and Funko”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Smith & Wesson Brands | $523.84 million | 1.13 | $18.48 million | $0.54 | 24.40 |
| Funko | $908.21 million | 0.39 | -$67.36 million | ($0.04) | -156.88 |
Smith & Wesson Brands has higher earnings, but lower revenue than Funko. Funko is trading at a lower price-to-earnings ratio than Smith & Wesson Brands, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
59.3% of Smith & Wesson Brands shares are owned by institutional investors. Comparatively, 99.2% of Funko shares are owned by institutional investors. 2.3% of Smith & Wesson Brands shares are owned by company insiders. Comparatively, 3.9% of Funko shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Analyst Ratings
This is a summary of recent recommendations and price targets for Smith & Wesson Brands and Funko, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Smith & Wesson Brands | 0 | 2 | 1 | 0 | 2.33 |
| Funko | 1 | 2 | 1 | 0 | 2.00 |
Smith & Wesson Brands presently has a consensus price target of $16.50, indicating a potential upside of 25.23%. Funko has a consensus price target of $7.08, indicating a potential upside of 12.88%. Given Smith & Wesson Brands’ stronger consensus rating and higher possible upside, equities analysts clearly believe Smith & Wesson Brands is more favorable than Funko.
Summary
Smith & Wesson Brands beats Funko on 9 of the 13 factors compared between the two stocks.
About Smith & Wesson Brands
Smith & Wesson Brands, Inc. is a holding company, which engages in the manufacture, design, and provision of firearms. Its portfolio includes handguns, long guns, handcuffs, suppressor, and other firearm-related products. The firm’s brands are Smith & Wesson, M&P, Thompson/Center Arms, and Gemtech. The company was founded by Horace Smith and Daniel Baird Wesson in 1852 and is headquartered in Maryville, TN.
About Funko
Funko, Inc., a pop culture consumer products company, designs, sources, and distributes licensed pop culture products in the United States, Europe, and internationally. The company provides media and entertainment content, including movies, television (TV) shows, video games, music, and sports; figures, handbags, backpacks, wallets, apparel, accessories, plush products, homewares, and digital non-fungible tokens; and art prints and vinyl records, posters, soundtracks, toys, books, games, and other collectibles. It markets its products under the Pop!, Loungefly, Funko, Mystery Minis, Bitty Pop!, Funko action figures, Funko Plush, and Funko Soda brand names; and licenses its properties under the classic evergreen, movie release, current TV, and current video game categories. The company sells its products through specialty retailers, mass-market retailers, e-commerce sites, and distributors; and at specialty licensing and comic book shows, conventions, and exhibitions, as well as through its e-commerce business. Funko, Inc. was incorporated in 2017 and is headquartered in Everett, Washington.
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