Financial Contrast: Smith Douglas Homes (NYSE:SDHC) vs. Traeger (NYSE:COOK)

Traeger (NYSE:COOK) and Smith Douglas Homes (NYSE:SDHC) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, earnings, dividends, risk and valuation.

Institutional and Insider Ownership

46.8% of Traeger shares are held by institutional investors. 16.2% of Traeger shares are held by company insiders. Comparatively, 84.2% of Smith Douglas Homes shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Traeger and Smith Douglas Homes”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Traeger	$559.52 million	0.23	-$115.18 million	($42.04)	-1.11
Smith Douglas Homes	$971.12 million	0.54	$10.69 million	$0.72	14.28

Smith Douglas Homes has higher revenue and earnings than Traeger. Traeger is trading at a lower price-to-earnings ratio than Smith Douglas Homes, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for Traeger and Smith Douglas Homes, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Traeger	1	5	1	0	2.00
Smith Douglas Homes	2	7	1	0	1.90

Traeger presently has a consensus price target of $50.50, suggesting a potential upside of 7.76%. Smith Douglas Homes has a consensus price target of $13.90, suggesting a potential upside of 35.21%. Given Smith Douglas Homes’ higher probable upside, analysts plainly believe Smith Douglas Homes is more favorable than Traeger.

Profitability

This table compares Traeger and Smith Douglas Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Traeger	-23.23%	-13.76%	-3.59%
Smith Douglas Homes	0.64%	-0.19%	-0.14%

Volatility & Risk

Traeger has a beta of 1.93, indicating that its stock price is 93% more volatile than the S&P 500. Comparatively, Smith Douglas Homes has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500.

Summary

Smith Douglas Homes beats Traeger on 10 of the 13 factors compared between the two stocks.

About Traeger

Traeger, Inc., together with its subsidiaries, designs, sources, sells, and supports wood pellet fueled barbecue grills for retailers, distributors, and direct to consumers in the United States. Its wood pellet grills are internet of things devices that allow owners to program, monitor, and control their grill through its Traeger app. The company also produces a library of digital content, including instructional recipes and videos that demonstrate tips, tricks, and cooking techniques that empower Traeger owners to progress their cooking skills; and short- and long-form branded content highlighting stories, community members, and lifestyle content from the Traegerhood. In addition, it provides wood pellets that are used to fire the grills; rubs, spices, and sauces; accessories, such as pop-and-lock accessory rail covers, drip trays, bucket liners, storage bins, and shelves; tools to aid in meal prep, cooking, and cleanup, including pellet storage systems, cleaning solutions, barbecue tools, and MEATER smart thermometer; replacement parts; and apparel and merchandise, including t-shirts, hooded sweatshirts, and baseball hats. Traeger, Inc. was founded in 1987 and is headquartered in Salt Lake City, Utah.

About Smith Douglas Homes

Smith Douglas Homes Corp., together with its subsidiaries, engages in the design, construction, and sale of single-family homes in the southeastern United States. It also provides closing, escrow, and title insurance services. The company sells its products to entry-level and empty-nest homebuyers. Smith Douglas Homes Corp. was founded in 2008 and is headquartered in Woodstock, Georgia.