Contrasting Snap-on (SNA) and Malibu Boats (MBUU)

Snap-on (NYSE: SNA) and Malibu Boats (NASDAQ:MBUU) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, earnings and profitability.

Insider & Institutional Ownership

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99.4% of Snap-on shares are held by institutional investors. 4.0% of Snap-on shares are held by insiders. Comparatively, 3.5% of Malibu Boats shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Snap-on has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, Malibu Boats has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500.

Dividends

Snap-on pays an annual dividend of $3.28 per share and has a dividend yield of 2.2%. Malibu Boats does not pay a dividend. Snap-on pays out 32.4% of its earnings in the form of a dividend. Snap-on has raised its dividend for 8 consecutive years.

Valuation and Earnings

This table compares Snap-on and Malibu Boats’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Snap-on $3.69 billion 2.27 $557.70 million $10.12 14.58
Malibu Boats $281.94 million 2.42 $28.35 million $1.51 21.99

Snap-on has higher revenue and earnings than Malibu Boats. Snap-on is trading at a lower price-to-earnings ratio than Malibu Boats, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Snap-on and Malibu Boats’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Snap-on 15.13% 20.54% 11.60%
Malibu Boats 4.64% 44.97% 12.49%

Analyst Recommendations

This is a summary of recent ratings and price targets for Snap-on and Malibu Boats, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Snap-on 0 2 6 0 2.75
Malibu Boats 0 2 4 1 2.86

Snap-on presently has a consensus price target of $194.00, indicating a potential upside of 31.49%. Malibu Boats has a consensus price target of $34.75, indicating a potential upside of 4.64%. Given Snap-on’s higher probable upside, equities research analysts plainly believe Snap-on is more favorable than Malibu Boats.

Summary

Snap-on beats Malibu Boats on 11 of the 18 factors compared between the two stocks.

Snap-on Company Profile

Snap-on Incorporated manufactures and markets tools, equipment, diagnostics, and repair information and systems solutions for professional users worldwide. The company operates through Commercial & Industrial Group, Snap-on Tools Group, Repair Systems & Information Group, and Financial Services segments. It offers hand tools, including wrenches, sockets, pliers, screwdrivers, punches and chisels, saws and cutting tools, pruning tools, torque measuring instruments, and other products; power tools, such as cordless, pneumatic, hydraulic, and corded tools; and tool storage products comprising tool chests, roll cabinets, and other products. The company also provides handheld and PC-based diagnostic products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems and services, point-of-sale systems, integrated systems for vehicle service shops, original equipment manufacturer purchasing facilitation services, and warranty management systems and analytics. In addition, it offers solutions for the service of vehicles and industrial equipment, such as wheel alignment equipment, wheel balancers, tire changers, vehicle lifts, test lane systems, collision repair equipment, vehicle air conditioning service equipment, brake service equipment, fluid exchange equipment, transmission troubleshooting equipment, safety testing equipment, battery chargers, and hoists. Further, the company provides financing programs to facilitate the sales of its products and support its franchise business. It serves aviation and aerospace, agriculture, construction, government and military, mining, natural resources, power generation, and technical education industries, as well as vehicle dealerships and repair centers. Snap-on Incorporated was founded in 1920 and is headquartered in Kenosha, Wisconsin.

Malibu Boats Company Profile

Malibu Boats, Inc. is a designer, manufacturer and marketer of performance sport boats. The Company’s segments include the U.S. and Australia. Each segment is engaged in the manufacturing, distribution, marketing and sale of performance sport boats. Its U.S. segment serves markets in North America, South America, Europe and Asia. Its Australia segment serves the Australian and New Zealand markets. The Company’s boats are used for water sports, including water skiing, wakeboarding and wake surfing, as well as general recreational boating. The Company sells its boats under Malibu and Axis Wake Research (Axis) brand names. The Company’s boats are constructed of fiberglass, equipped with inboard propulsion systems and available in a range of sizes and hull designs. The Company also offers various accessories and aftermarket parts. The Company’s boat models include Malibu M Series, Malibu Wakesetter, Malibu Response and Axis.

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