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About Johnson Outdoors
Yeah, yeah, SC Johnson.
While this prominent Wisconsin-based household chemical products manufacturer, marketer and seller is best known for its work within the confines of one’s abode, the controlling interest in the company (of course, who else but the Johnson family) also has you taken care of on the outdoors front with publicly traded (SC Johnson isn’t publicly traded at the time of this writing), also headquartered in Racine, Wisconsin, Johnson Outdoors.
Johnson Outdoors is a supplier of recreational products and goods in the recreational and camping space(s), selling tents, outdoor furniture such as chairs, grills, stoves, kayaks, fishing gear and many other pieces of equipment that undoubtedly enhance the outdoors experience.
The company sells these products through its core brands including Minn Kota, Humminbird, Scubapro, Jetboil, Ocean Kayak and a few others.
Johnson Outdoors apparently has 24 locations around the globe.
From the standpoint of whether or not this company and its businesses are recession resistant, this is somewhat tough to initially say, for us at least, as on one hand those who enjoy the outdoors consistently to begin with can likely afford (since they view it is as more of a priority in their lives) Johnson Outdoors’ products, regardless of boom, bust, or anything in between.
At the same token, camping, fishing and other specialty outdoors equipment costs a pretty penny to not only initially purchase but to properly maintain throughout its years of use, therefore, if there aren’t enough willing to prioritize dedicating a considerable amount of their income to such equipment when economic times get tough, Johnson Outdoors could prove to be not resistant to recessions much at all.
Let’s allow the numbers to speak for themselves, shall we?
Johnson Outdoors’ stock financials
Trading at a share price of $60.29, Johnson Outdoors’ stock (NASDAQ: JOUT) has a price-to-earnings (P/E) ratio of 14.06, a market capitalization of $618.18 million and shells out an annual dividend of $1.24.
This is a fine start as shares of the company’s stock (NASDAQ: JOUT) appear to be modestly undervalued, given that it is commonly held that a P/E of 20 indicates that a stock is trading at exactly fair value and subsequently anything lower implies that it is trading at a discount.
Evidently, Johnson Outdoors’ stock is in discount territory.
It is also a plus that this company distributes an annual dividend of north of a dollar to its shareholders.
Getting a bit more familiar with this company’s inner financial workings, Johnson Outdoors’ executives are tasked with managing and tending to $680 million in terms of total assets as well as $192 million in terms of total liabilities.
This is yet another positive for Johnson Outdoors as it is seemingly well capitalized (i.e., in this particular case, total asset-heavy by a wide margin) and apparently capable of marching through the rest of the current recession, barring any extraordinary, cataclysmic economic outcomes.
Additionally, according to this company’s recent total annual revenue figures, Johnson Outdoors is certainly more recession resistant than not.
Specifically, according to the company’s income statement, its revenues in 2018 stood at $544 million, rose the following year to $562 million, climbing to $594 million in 2020 and leapt to $752 million in 2021, plateauing the following year to its latest reported figure (displayed on TD Ameritrade’s platform) at $743 million.
It is quite likely that this company had completely finalized an acquisition and bulked up its total annual revenues as a result between its reports on 2020 and 2021, which to us, is neither a good nor bad thing.
All things considered in this sphere, there don’t appear to be many hints of a slowdown with this company in the last handful of years, which is far from a bad thing.
As it relates to the company’s cash flow statement, Johnson Outdoors’ net income and total cash from operations have, for the most part, been both consistent and positive since 2018, which is frankly what we expected from this sort of established, hopefully high-margin business.
Johnson Outdoors’ stock fundamentals
Speaking of margins, according to TD Ameritrade’s platform, Johnson Outdoors’ trailing twelve month (TTM) net profit margin is perched away at 5.7% to the industry’s average of -11.21%.
Initially, we were expecting a mid-to-high single digit TTM net profit margin and that’s just about exactly what we got.
Not only are we at peace with the company’s TTM net profit margin, but we’re also encouraged by the fact that it’s notably greater than that of the industry, on average.
From the perspective of its TTM returns on assets and investment(s), Johnson Outdoors’, on both accounts, beat the industry’s averages by solid margins.
As an example, the company’s TTM returns on investment(s), according to TD Ameritrade’s platform, sit at 7.84% to the industry’s average of 5.38%.
Should you buy Johnson Outdoors stock?
Since April of 2021, Johnson Outdoors’ stock (NASDAQ: JOUT) has been cut in half and then some.
For investors looking to get into an overall stable line of business, in a stable company with an excellent balance sheet, a more than solid TTM net profit margin, a decent annual dividend, competitive core returns and a portfolio of brands that are well received by the recreational outdoors and camping communities, there are definitely more pros than cons, from our perspective, when considering an investment in Johnson Outdoors.
We give the company’s stock a “buy” rating.
DISCLAIMER: This analysis of the aforementioned stock security is in no way to be construed, understood, or seen as formal, professional, or any other form of investment advice. We are simply expressing our opinions regarding a publicly traded entity.