Reviewing JAKKS Pacific (NASDAQ:JAKK) and Funko (NASDAQ:FNKO)

Funko (NASDAQ:FNKO) and JAKKS Pacific (NASDAQ:JAKK) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.

Analyst Ratings

This is a summary of recent recommendations for Funko and JAKKS Pacific, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Funko	1	2	1	0	2.00
JAKKS Pacific	0	1	2	0	2.67

Funko presently has a consensus price target of $7.08, indicating a potential downside of 0.25%. JAKKS Pacific has a consensus price target of $57.00, indicating a potential upside of 60.61%. Given JAKKS Pacific’s stronger consensus rating and higher possible upside, analysts plainly believe JAKKS Pacific is more favorable than Funko.

Institutional & Insider Ownership

99.2% of Funko shares are owned by institutional investors. Comparatively, 44.4% of JAKKS Pacific shares are owned by institutional investors. 3.9% of Funko shares are owned by company insiders. Comparatively, 4.2% of JAKKS Pacific shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Funko has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, JAKKS Pacific has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500.

Profitability

This table compares Funko and JAKKS Pacific’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Funko	-0.21%	2.61%	0.71%
JAKKS Pacific	4.17%	8.18%	4.57%

Earnings & Valuation

This table compares Funko and JAKKS Pacific”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Funko	$908.21 million	0.44	-$67.36 million	$0.07	101.44
JAKKS Pacific	$570.67 million	0.72	$9.87 million	$2.13	16.66

JAKKS Pacific has lower revenue, but higher earnings than Funko. JAKKS Pacific is trading at a lower price-to-earnings ratio than Funko, indicating that it is currently the more affordable of the two stocks.

Summary

JAKKS Pacific beats Funko on 11 of the 14 factors compared between the two stocks.

About Funko

Funko, Inc. is a consumer products company that designs, sources and sells licensed and original pop-culture collectibles and merchandise. Its best-known product is the Pop! vinyl figure, which features characters from movies, television, video games, sports and other entertainment properties. The company also offers plush products, action figures, accessories, apparel, home goods and games. Funko’s portfolio includes brands such as Pop!, Loungefly and Mondo. Loungefly focuses on licensed bags, wallets, accessories and other lifestyle products, while Mondo is known for premium collectibles, posters, apparel and related merchandise.

About JAKKS Pacific

JAKKS Pacific, Inc. is a toy and consumer products company that develops, designs, produces and markets toys, games, seasonal products and related merchandise. Its product portfolio includes action figures, dolls, roleplay toys, dress-up and costume products, plush items, outdoor and sports toys, games, and other products for children and families. The company markets products under its own brands, including Maui, Disguise and Moose Mountain, as well as through licensing and strategic partnerships with entertainment and consumer brands.