Sportsman’s Warehouse (SPWH) versus Office Depot (ODP) Head to Head Review

Sportsman’s Warehouse (NASDAQ: SPWH) and Office Depot (NASDAQ:ODP) are both small-cap retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, risk, earnings, analyst recommendations, institutional ownership and valuation.

Earnings & Valuation

This table compares Sportsman’s Warehouse and Office Depot’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sportsman’s Warehouse $809.67 million 0.30 $17.74 million $0.50 11.40
Office Depot $10.24 billion 0.16 $181.00 million $0.45 6.42

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

Dividends

Office Depot pays an annual dividend of $0.10 per share and has a dividend yield of 3.5%. Sportsman’s Warehouse does not pay a dividend. Office Depot pays out 22.2% of its earnings in the form of a dividend.

Profitability

This table compares Sportsman’s Warehouse and Office Depot’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sportsman’s Warehouse 1.97% 48.91% 5.14%
Office Depot 1.01% 9.60% 3.38%

Institutional & Insider Ownership

86.9% of Sportsman’s Warehouse shares are held by institutional investors. Comparatively, 89.8% of Office Depot shares are held by institutional investors. 4.2% of Sportsman’s Warehouse shares are held by company insiders. Comparatively, 2.2% of Office Depot shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Sportsman’s Warehouse has a beta of -0.66, suggesting that its share price is 166% less volatile than the S&P 500. Comparatively, Office Depot has a beta of 2.64, suggesting that its share price is 164% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Sportsman’s Warehouse and Office Depot, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sportsman’s Warehouse 0 3 3 0 2.50
Office Depot 1 4 1 0 2.00

Sportsman’s Warehouse presently has a consensus target price of $5.50, indicating a potential downside of 3.51%. Office Depot has a consensus target price of $4.29, indicating a potential upside of 48.36%. Given Office Depot’s higher possible upside, analysts plainly believe Office Depot is more favorable than Sportsman’s Warehouse.

Summary

Sportsman’s Warehouse beats Office Depot on 10 of the 16 factors compared between the two stocks.

About Sportsman’s Warehouse

Sportsman's Warehouse Holdings, Inc., together with its subsidiaries, operates as an outdoor sporting goods retailer in the United States. It offers camping products, such as backpacks, camp essentials, canoes and kayaks, coolers, outdoor cooking equipment, sleeping bags, tents, and tools; and clothing products, including camouflage, jackets, hats, outerwear, sportswear, technical gear, and work wear. The company also provides fishing products comprising bait, electronics, fishing rods, flotation items, fly fishing products, lines, lures, reels, tackles, and small boats; and foot wear products consisting of hiking and work boots, socks, sport sandals, technical footwear, trial and casual shoes, and waders. In addition, it offers hunting and shooting products, such as ammunition, archery items, ATV accessories, blinds and tree stands, decoys, firearms, firearms safety and storage products, reloading equipment, and shooting gear products; and optics, electronics, and accessories, including gift items, GPS devices, knives, lighting, and optics. Further, the company's stores provide archery technician services, fishing-reel line winding, gun bore sighting and scope mounting, and other services, as well as issues hunting and fishing licenses. Additionally, it offers various private label offerings under the Rustic Ridge, Killik, Vital Impact, Yukon Gold, Lost Creek, and Sportsman's Warehouse brands. As of May 5, 2018, the company operated 89 retail stores in 22 states. Sportsman's Warehouse Holdings, Inc. was founded in 1986 and is headquartered in Midvale, Utah.

About Office Depot

Office Depot, Inc., together with its subsidiaries, provides various products and services. It operates in three divisions: Retail, Business Solutions, and CompuCom. The Retail division operates retail stores, which offer office supplies; technology products and solutions; business machines and related supplies; print, cleaning, breakroom, and facilities products; and office furniture in the United States, Puerto Rico, and the U.S. Virgin Islands. Its stores also provide printing, reproduction, mailing, and shipping services. As of December 31, 2017, this division operated 1,378 office supply stores. The Business Solutions division sells office supply products and services through sales forces, catalogs, and telesales, as well as through Internet sites in the United States, Puerto Rico, U.S. Virgin Islands, and Canada. The CompuCom division sells information technology (IT) outsourcing services and products in the United States, Canada, and Costa Rica. It offers a range of solutions, including end user computing (tablets, smartphones, laptops, and desktops), data center management, service desk, network infrastructure, and IT workforce solutions. This division serves its customers through IT service and sales representatives and telesales, as well as Internet sites. The company offers its products under various labels, including Office Depot, OfficeMax, Foray, Ativa, TUL, Realspace, WorkPro, Brenton Studio, Highmark, and Grand & Toy. Office Depot, Inc. was founded in 1986 and is headquartered in Boca Raton, Florida.

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