Critical Survey: Dewey Electronics (OTCMKTS:DEWY) & Smith & Wesson Brands (OTCMKTS:SWBI)

Dewey Electronics (OTCMKTS:DEWY) and Smith & Wesson Brands (NASDAQ:SWBI) are both small-cap aerospace companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.

Risk and Volatility

Dewey Electronics has a beta of 0.35, meaning that its stock price is 65% less volatile than the S&P 500. Comparatively, Smith & Wesson Brands has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500.

Earnings and Valuation

This table compares Dewey Electronics and Smith & Wesson Brands’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dewey Electronics $5.69 million 0.69 $1.25 million N/A N/A
Smith & Wesson Brands $678.39 million 1.76 -$61.23 million $0.82 26.24

Dewey Electronics has higher earnings, but lower revenue than Smith & Wesson Brands.

Analyst Recommendations

This is a summary of current ratings and target prices for Dewey Electronics and Smith & Wesson Brands, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dewey Electronics 0 0 0 0 N/A
Smith & Wesson Brands 0 1 2 0 2.67

Smith & Wesson Brands has a consensus target price of $21.00, suggesting a potential downside of 2.42%. Given Smith & Wesson Brands’ higher probable upside, analysts plainly believe Smith & Wesson Brands is more favorable than Dewey Electronics.

Institutional & Insider Ownership

67.0% of Smith & Wesson Brands shares are owned by institutional investors. 37.5% of Dewey Electronics shares are owned by company insiders. Comparatively, 2.7% of Smith & Wesson Brands shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Dewey Electronics and Smith & Wesson Brands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dewey Electronics 20.75% 50.10% 27.63%
Smith & Wesson Brands -9.03% 10.26% 5.76%

Summary

Smith & Wesson Brands beats Dewey Electronics on 6 of the 11 factors compared between the two stocks.

About Dewey Electronics

The Dewey Electronics Corporation designs and manufactures compact diesel power generators, hybrid power systems, and vehicle auxiliary power units for military markets worldwide. It offers 2kW military tactical generators, man-portable generators, and generator accessories; and non-power product lines, such as rodmeters, sea valves, hull liners, indicators/transmitters, pre-regulators, and MK-21 exploders. The company was founded in 1955 and is based in Oakland, New Jersey.

About Smith & Wesson Brands

Smith & Wesson Brands, Inc. is a holding company, which engages in the manufacture, design, and provision of firearms. It operates through the Firearms and Outdoor Products & Accessories segments. The Firearms segment comprises the manufacture of handguns, long guns, handcuffs, suppressors, and other firearm-related products for sale to a wide variety of customers. The Outdoor Products & Accessories segment engages in the distribution, manufacture, and design of reloading, gunsmithing, and gun cleaning supplies; stainless-steel cutting tools and accessories; flashlights; tree saws and related trimming accessories; shooting supplies, rests, and other related accessories; apparel; vault accessories; laser grips and laser sights; and a full range of products for survival and emergency preparedness. The company was founded by Michell A. Saltz on June 17, 1991 and is headquartered in Springfield, MA.

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