Dover Saddlery (NASDAQ: DOVR) and West Marine (NASDAQ:WMAR) are both cyclical consumer goods & services companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, risk, institutional ownership, valuation, dividends and earnings.

Profitability

This table compares Dover Saddlery and West Marine’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dover Saddlery -3.40% -17.52% -6.75%
West Marine 1.15% 2.56% 1.83%

Analyst Recommendations

This is a summary of recent recommendations for Dover Saddlery and West Marine, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dover Saddlery 0 1 0 0 2.00
West Marine 0 2 0 0 2.00

West Marine has a consensus price target of $10.49, indicating a potential downside of 19.13%. Given West Marine’s higher probable upside, analysts plainly believe West Marine is more favorable than Dover Saddlery.

Valuation and Earnings

This table compares Dover Saddlery and West Marine’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Dover Saddlery N/A N/A N/A N/A N/A
West Marine $697.67 million 0.47 $39.13 million $0.31 41.82

West Marine has higher revenue and earnings than Dover Saddlery.

Insider & Institutional Ownership

57.9% of West Marine shares are owned by institutional investors. 27.5% of West Marine shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

West Marine pays an annual dividend of $0.20 per share and has a dividend yield of 1.5%. Dover Saddlery does not pay a dividend. West Marine pays out 64.5% of its earnings in the form of a dividend.

Summary

West Marine beats Dover Saddlery on 8 of the 9 factors compared between the two stocks.

Dover Saddlery Company Profile

Dover Saddlery, Inc. is a retailer and omni-channel marketer of equestrian products in the United States. The Company sells its products through omni-channel, including direct and retail. The Company offers a range of products required to own, ride, train and compete with a horse. The Company’s equestrian product line includes a range of separate items such as saddles, tack, specialized apparel, footwear, horse clothing, horse health and stable products. As of December 31, 2013, the Company, through its subsidiaries, operates twenty-one retail stores under the Dover Saddlery brand and one retail store under the Smith Brothers brand. It maintains two catalogs. The Dover Saddlery catalog caters to the mid to high-end, English-style, equestrian products customer. The Smith Brothers catalog is aimed at the Western-style, equestrian products customer. The Company offers web-base marketing through its Websites www.doversaddlery.com and www.smithbrothers.com.

West Marine Company Profile

West Marine, Inc. is a waterlife outfitter for cruisers, sailors, anglers and paddlesports enthusiasts. The Company offers a selection of core boating and water recreation products, primarily serving the needs of boat owners and professionals providing services to them. It services its customers through physical stores and two e-commerce Websites. It is a specialty retailer of boating supplies, gear, apparel, footwear and other waterlife-related products. It operates approximately 260 stores located in approximately 40 states, Puerto Rico and Canada. Its products include boating products and merchandise expansion products. Its boating products include maintenance, electronics, sailboat hardware, anchors/docking/moorings, engine systems, boats/outboards, ventilation, navigation, trailering, seating/boat covers and barbecues/appliances. Its merchandise expansion products include clothing accessories, fishing, watersports, paddlesports, coolers and waterlife lifestyle accessories.

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