Critical Contrast: Movado Group (NYSE:MOV) and Rocky Brands (NASDAQ:RCKY)

Rocky Brands (NASDAQ:RCKY) and Movado Group (NYSE:MOV) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, dividends, institutional ownership, analyst recommendations and earnings.

Earnings & Valuation

This table compares Rocky Brands and Movado Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rocky Brands	$481.98 million	0.73	$22.27 million	$3.82	12.26
Movado Group	$671.31 million	1.05	$26.55 million	$1.80	17.48

Movado Group has higher revenue and earnings than Rocky Brands. Rocky Brands is trading at a lower price-to-earnings ratio than Movado Group, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Rocky Brands has a beta of 2.4, suggesting that its share price is 140% more volatile than the S&P 500. Comparatively, Movado Group has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.

Profitability

This table compares Rocky Brands and Movado Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rocky Brands	5.72%	12.28%	6.43%
Movado Group	6.00%	8.49%	5.78%

Analyst Ratings

This is a summary of recent ratings and price targets for Rocky Brands and Movado Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rocky Brands	0	3	1	0	2.25
Movado Group	0	1	1	2	3.25

Rocky Brands presently has a consensus target price of $50.00, suggesting a potential upside of 6.75%. Movado Group has a consensus target price of $40.00, suggesting a potential upside of 27.14%. Given Movado Group’s stronger consensus rating and higher possible upside, analysts clearly believe Movado Group is more favorable than Rocky Brands.

Dividends

Rocky Brands pays an annual dividend of $0.68 per share and has a dividend yield of 1.5%. Movado Group pays an annual dividend of $1.60 per share and has a dividend yield of 5.1%. Rocky Brands pays out 17.8% of its earnings in the form of a dividend. Movado Group pays out 88.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

75.1% of Rocky Brands shares are owned by institutional investors. Comparatively, 72.1% of Movado Group shares are owned by institutional investors. 7.6% of Rocky Brands shares are owned by insiders. Comparatively, 30.8% of Movado Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Movado Group beats Rocky Brands on 10 of the 16 factors compared between the two stocks.

About Rocky Brands

Rocky Brands, Inc. designs, manufactures, and markets footwear and apparel in the United States, Canada, and internationally. It operates through Wholesale, Retail, and Contract Manufacturing segments. The Wholesale segment offers products, which includes sporting goods stores, outdoor retailers, independent shoe retailers, hardware stores, catalogs, mass merchants, uniform stores, farm store chains, specialty safety stores, specialty retailers, and online retailers in retail locations through a range of distribution channels. Retail segment sells its products directly to consumers through its websites comprising rockyboots.com, georgiaboot.com, durangoboot.com, muckbootcompany.com, xtratuf.com, lehighoutfitters.com, lehighsafetyshoes.com, and slipgrips.com; and third-party marketplaces and Rocky Outdoor Gear Stores. The Contract Manufacturing segment include private label sales and any sales to customers which are contracted to manufacture a specific footwear product for a customer and include sales to the U.S. Military. In addition, it serves industrial and construction workers, as well as workers in the hospitality industry, such as restaurants or hotels; farmers and ranchers; western; commercial military personnel; hunting, fishing, camping, and hiking enthusiasts; law enforcement, security personnel, and postal employees; and for the U.S. military personnel. The company sells its products under the Rocky, Georgia Boot, Durango, Lehigh, Muck, XTRATUF, Servus, Ranger, and Michelin brand names Rocky Brands, Inc. was formerly known as William Brooks Shoe Co. The company was founded in 1932 and is headquartered in Nelsonville, Ohio.

About Movado Group

Movado Group, Inc. designs, sources, markets, and distributes watches in the United States and internationally. The company operates in two segments, Watch and Accessory Brands, and Company Stores. The company offers its watches under the Movado, Concord, Ebel, Olivia Burton, and MVMT brands, as well as licensed brands comprising Coach, Tommy Hilfiger, HUGO BOSS, Lacoste, and Calvin Klein. It also designs, sources, markets, and distributes jewelry and other accessories; and provides after-sales and shipping services. The company’s customers include jewelry store chains, department stores, independent regional jewelers, network of independent distributors, online marketplaces, licensors’ retail stores, and third-party e-commerce retailers. It sells directly to consumers through its e-commerce platforms. The company was formerly known as North American Watch Corporation and changed its name to Movado Group, Inc. in 1996. Movado Group, Inc. was founded in 1961 and is headquartered in Paramus, New Jersey.